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THE SOUTH AFRICAN INSTITUTE OF CHARTED ACCOUNTANTS

PRESENTATION TO THE PORTFOLIO COMMITTEE ON FINANCE

Presenters : Mrs J Arendse

Mr M van Blerck

Comments on the 2005/6 Budget and tax policy

We recognize the achievements made by Government over the last decade in meeting significant macroeconomic targets and creating a stable business environment, and Minister Manuel is especially to be congratulated in this regard.

1. Personal tax

1.1 General

The R6,8 billion tax relief provided to individuals is welcome, especially in the current low-inflation environment as, in addition to compensating for fiscal drag, real relief is provided, putting real money in the hands of individuals (of the R6.8 billion relief, R3.3 billion went towards compensating for fiscal drag).

1.2 Interest exemption

The raising of the exemption levels for interest and dividends, for both under- and over-65s, is also welcome and should serve to encourage savings further. The majority of the population is, however still "unbanked", hence they are not able to benefit from the interest exemption. Most people are active in the informal economy and there are currently no tax incentives to encourage savings in the informal economy. A similar exemption, of equal amount to the interest exemption, should be considered to provide parity for informal economies.

1.3 Travel allowance

Amendments to the tax treatment of travel allowances and company cars were expected, having been tentatively announced in the 2004 Budget, but the proposed amendments are unnecessarily extreme. The following example shows the additional tax that becomes payable (at a rate of 40%) as a result of the lower deduction that may be claimed against the travel allowance:

Comparison of the effect of amendments on taxable portion of travel allowances

Assumption:
Travel = 32000km for the year; no log book kept
	Travel deduction
	Old	New		Additional
	Tables	Tables	Difference	Tax at 40%
Cost of vehicle:
R 50,000	22093	19311	2783	1113
R 100,000	34033	26407	7626	3051
R 200,000	56285	43498	12787	5115
R 300,000	78077	58464	19613	7845
R 340,000	86793	63753	23040	9216
R 340,001	88972	69668	19304	7722
R 360,000	91151	69668	21483	8593
R 500,000	121659	69668	51991	20796

This example also demonstrates that the deemed rates are capped at R340 001, rather than the R360 000 that was announced in the Budget speech.

The abuse of the "deemed system" stems from taxpayers who exaggerate their mileage in order to get a benefit from the system of deemed private mileage and the resultant business mileage. This abuse could easily be stopped by introducing log books for business travel. Instead, the measures announced by the Minister in his Budget Speech, are aimed at all employees who legitimately use their vehicles at their risk, for business travel. The reductions in the "fixed cost" element in the tables based on the value of a motor vehicle are harsh as they result in significant additional tax liabilities for taxpayers who legitimately use their vehicles for business purposes. Whilst the capping of the cost of vehicles for purposes of tax is supported, the overall reduction of the fixed cost element cannot be condoned. The 30% residual used in these calculations, introduced in one step, is harsh and should, if anything, rather be phased in to prevent hardship to those taxpayers who legitimately use their vehicles for business travel.

1.4 Tax tables

A review of the maximum marginal tax rate for individuals should be considered to place South Africa in parity with trends in other developing economies and to minimize the potential for arbitrage opportunities between companies and individuals.

2. Company tax

The reduction in the company tax rate is very positive, but the rate needs to drop further to encourage investment. It is encouraging to note the comment by National Treasury (Business Day 28 February 2005) that the rate may drop further, "as things become more affordable". We look forward to the time that the tax rate on distributable earnings (that is, including STC) drops below 30%. This would be achieved, for example, by a 25% corporate tax rate and 7% STC rate, resulting in a combined rate of 29,9% (that is, 25% plus ⁷/₁₀₇ of the remaining 75%).

2.1 Small business incentives

The proposed concessions for the small business sector are seen by many as the most significant measure in the Budget. We strongly support these incentives, including the "non-tax issues" such as the assistance that will be provided by SARS to small businesses.

The proposed revision of the definition of "small business corporation" to include those with turnovers up to R6 million (formerly R5 million) and to include service enterprises is also significant as the previous definition severely constrained the scope of the benefit afforded to SMMEs. Clarity is urgently needed on which service businesses will fall in, and out of, the revised definition, particularly as the amendments will become effective on 1 April 2005 and taxpayers have little time to plan ahead. It is therefore requested that SARS release these details as soon as possible as the draft legislation will probably only be available in May or June.

We urge that further reforms be introduced in 2006 to further enhance these incentives, and that these should apply to qualifying businesses with turnovers up to R10 million, as small and medium-sized enterprise is the lifeblood of South Africa’s economic growth.

The requirement for four full-time employees that are actively involved in the service of the business may prove to be unnecessarily punitive as many SMMEs employ fewer employees, particularly in the early years of operation, which is also the time when they are in desperate need of tax relief to ensure their survival.

The relief offered by way of requiring VAT returns every four months (instead of bi-monthly) will ease the administrative burden of SMMEs but there is also the concern that the cash flow requirements of the business will be such that, in reality, it may be more difficult to have the cash necessary to make the required VAT payment when payment takes place four months after the supply.

2.2 Tax allowance for strategic industrial projects

As was stated in the Budget speech, the allowance will lapse in July 2005. We are concerned, however, that the regulations referred to in section 12G(7) have not yet been published, resulting in continuing uncertainty amongst potential beneficiaries of the allowance.

2.3 Corporate restructuring provisions

Amendments to the levels affecting Part III of the Income Tax Act are welcome and we thank National Treasury and SARS for considering the proposals we made in this regard. These proposed amendments will facilitate both conventional restructuring, as well as the need to adapt corporate groups to more easily facilitate BEE transactions. However, more fine tuning needs to be done as the legislation is still flawed.

3. Financial transaction tax relief

The abolition of duty on debit entries is particularly welcome, given this duty's disproportionately negative effect on lower-income groups, who often have a multiplicity of small debit transactions.

The abolition of duty on new share issues is also welcome, as it promotes tax neutrality between raising debt and equity.

4. RSC levies

These levies have long outlived their purpose, and their demise is long overdue. It is hoped that they will be replaced with a rational system of transfers from centrally-collected revenue, rather than by an alternative flawed tax.

5. Environmental sustainability

The proposed amendments are welcomed in the light of our growing recognition of the importance of the environment.

6. Exchange control amnesty

The total assets disclosed in the amnesty, and the ongoing increase in tax revenue, raises the question whether another, similar amnesty should be considered. There have been many queries from persons who failed to take advantage of the amnesty and a second amnesty may well yield another substantial source of additional tax revenue, particularly since a second amnesty could be subject to a higher levy.

7. Retirement funds tax

Although the current proposals to increase the basic interest exemption and raise the tax threshold for over-65s provides meaningful relief for pensioners, there is much that still needs to be done with regard to the taxation of retirement funds. Every year the tax on retirement funds removes a significant amount of capital from retirement savings. We look forward to the proposals promised by National Treasury later this year. The new retirement funding legislation needs to be implemented as soon as possible to reinforce recommendations encouraging people to save towards their retirement.

8. Anti-avoidance provisions

The comments made regarding anti-avoidance are worrying, but the forthcoming discussion document may well set out a more reasoned viewpoint and we will welcome the opportunity to respond.

9. Transfer duty

The relief provided by the abolition of stamp duties and the lifting of the threshold for transfer duties, will accelerate the acquisition of property at the lower end of the market. However the adjustment is still lagging behind as compared to recent increases in the property sector.

The relief provided by the rate reduction is, however, likely to be offset or even eradicated by other transaction costs relating to the acquisition of property, particularly bond registration costs and legal fees. These fees are usually payable upfront in full. The majority of the people buying property in the R150 000-plus range cannot afford to pay these fees upfront. Future legislation should therefore seek to address this by either granting some form of relief for these costs, or as an alternative these costs should be deductible from taxable income.

10. Technical amendments

An unfortunate trend that has emerged in the last few years is that legislative anomalies are addressed on an ad hoc basis each year. We strongly recommend that in future, more time be given in the legislative process to allow wider and more effective consultation before the legislation is amended.

SAICA made a comprehensive submission on the draft Revenue Laws Amendment Bill, 2004 and, whilst some of our comments were addressed and some accepted, others that were not responded to or rejected were, in our view, worthy of further attention. We therefore set out below those comments that we suggest should be readdressed and included as technical amendments to be considered in 2005:

10.1 Annexure 1: Broad-based employee share initiatives

10.1.1 SAICA’s comment:

The tax concession is not a total exemption from tax but a deferral. The real concession or benefit is that the employer company now obtains an income tax deduction in respect of the market value of the qualifying equity instrument at date of grant. The value of the free shares is ultimately taxed when the employee disposes of the shares. If the disposal is within a period of 5 years from date of grant, then the value is taxed as income. If the disposal is after the 5 year period, the value is taxed as capital gain provided that the share is a share in a listed company Section 9B currently allows a taxpayer to elect the proceeds on disposal of a listed share held for 5 years or more to be treated as a capital receipt and hence subject to CGT as opposed to income tax. This election is not available to taxpayers who dispose of unlisted shares. We strongly urge you to amend the provisions of section 9B to include a qualifying equity share held for a minimum period of 5 years.

There appears to be an anomaly in the taxation of the gain that is taxed under the Broad-based employee share initiative in terms of the proposed section 8B and the taxation of so-called Executive Equity Schemes in terms of the proposed revised section 8A of the Act.

The broad-based proposal grants an initial deferral of the gain, but then penalises the employee by subjecting the entire gain to income tax whilst it is the practice of SARS to subject a portion of the gain to CGT under the Executive scheme where the executive disposes of the shares before 5 years.

SARS/NT response:

"This comment is not accepted. Section 9B only applies to shares held as trading stock and it is extremely unlikely that broad-based share incentive shares will be held as trading stock."

10.1.2 SAICA’s further response:

It appears that SAICA’s comment may not have been properly understood. If an employee disposed of unlisted shares after 5 years, there was no provision for the employee to elect that the proceeds automatically be regarded as capital. It is recommended that the provisions of section 9B should be amended to cater for unlisted shares, having regard to the fact that section 8B applies to both listed and unlisted shares. It is therefore recommended that section 9B should apply to qualifying equity shares as defined in section 8B.

10.2 Annexure 8: Stamp Duties amendments

10.2.1 SAICA’s comment:

The removal of the limit in respect of rentals (previously, the rental for stamp duty purposes was limited to the market price of the immoveable property in question) is prejudicial in cases of long-term leases, for example 99 year leases. There is no basis for stamp duty to exceed the previous limit. Alternatively, the stamp duty should be subject to the maximum amount of transfer duty that would have been payable had the lessee acquired the immoveable property at that date of commencement of the lease at the market price.

SARS/NT response:

"This comment is not accepted. Under current law no linkage exists between Stamp duty and Transfer Duty. The proposed stamp duty is 0.5% as opposed to the average of 5% transfer duty. The low rate of stamp duty is unlikely to reach the maximum transfer duty therefore the capping of the amount is not required."

10.2.2 SAICA’s further response:

We request that this comment be reconsidered as the total rentals payable in absolute terms over a long lease would exceed the market value of the property.

10.3 Annexure 12: Share for property transfers

10.3.1 SAICA’s comment:

The new proposed section 24B grants a company a "deemed expenditure actually incurred" on the acquisition of any asset from a non-connected person. With respect, we cannot see why this provision is not extended to the acquisition of goods and services where the acquiring company issues shares as consideration for such acquisition.

The acquirer is currently subject to income tax on the value of the shares in terms of the definition of "gross income", and there appears to be no symmetry where the company acquiring the goods or services is not entitled to any deduction for the issue of such shares.

SARS/NT response:

Not addressed.

10.3.2 SAICA’s further response:

There does not appear to be any conceptual basis for differentiating between the acquisition of assets and services where the acquirer issues shares as consideration for such acquisition. We therefore request that our comment be reconsidered.

10.4 Annexure 13: Technical and textual amendments

10.4.1 Amendments to sections 7(8) and 25B
SAICA’s comment:

The Explanatory Memorandum indicates that the fear is that income of an offshore trust will not be attributed to a donor if it is not "income" as defined, which, in the case of a non-resident trust, requires the gross income to be from a South African source. But this is not the correct interpretation of "income". In CIR v Simpson, 16 SATC 268, the Appellate Division (as it then was) held that, in relation to (what is now) section 7(2), the word "income" must not be given its defined meaning but rather it means profits or gains.

It is a principle of statutory interpretation that where a word or expression has been given a meaning, it must be given the same meaning elsewhere in the section unless a contrary indication is clearly evident. There is no such contrary indication.

The reason why Watermeyer JA (as he then was) gave that interpretation was that to give "income" its defined meaning caused difficulties, principally that there was no provision for the husband (in the case of section 7(2)) or the donor (in the case of section 7(8)) to get a deduction for expenses.

Based on Simpson's case there is thus no reason to amend section 7(8) because the word "income" means profits or gains, without reference to source, and that is exactly what SARS wishes to have attributable to the donor. But if it insists on making the amendment, then a further amendment has to be introduced to deal with expenses, as has been done, for example, in section 25B(3).

The stated aim of this section is to prevent tax avoidance by the shifting by South African residents of assets offshore via foreign trusts. Following the latest circulars by the Exchange Control Department of the Reserve Bank dealing with so-called looping structures, it is effectively impossible for a foreign trust funded by a South African resident to derive South African sourced income without contravening the Exchange Control Regulations. Accordingly it is very unlikely that a South African court will favour an interpretation of this section that will result in the section only applying to attribute income earned in contravention of South African law.

The rationale given for the proposed amendments to section 25B is the same as that given for the amendments to section 7(8). Furthermore, the same solution, involving the alteration of references to "income" to references to "an amount", is proposed.

SARS/NT response:

No response.

SAICA’s further response:

We request that our comments be reconsidered as, on a plain reading of the amended section 7(8), the taxpayer would now be taxed on gross income, which could surely not have been intended.

10.4.2 Section 45(4)(a)
SAICA’s comment:

Section 45(4)(a): the anti-avoidance provision should only apply if the parties to the transaction cease to form part of the same group within a period of 18 months.

SARS/NT response:

No response.

SAICA’s further response:

We request that our comments be reconsidered as a time period should be specified in the anti-avoidance provisions.

10.4.3 Section 64C(4)
SAICA’s comment:

The deletion in section 64C(4) of paragraphs (g) and (j) compounds a problem that arose out of the 2003 amendments, and this problem is not solved by the rewording of paragraph (k)(ii). The law allows interest-free loans within members of the same group without triggering STC, but the requirement that the exemption is limited to profits and reserves "that arose" while the shareholder and relevant company were members of the same group is going to cause significant practical problems in relation to a group’s treasury operations. The fact is that when a new company joins the group it is inevitable that it will be integrated into the group and it is impractical and, indeed, impossible, to dissect intra-group loans between those representing reserves which arose prior to acquisition and those which arose thereafter.

Moreover, there might be a loan within a group that is five years old, a portion of which was made out of pre-acquisition reserves. Prior to 2003 such a loan was exempt under the provisions of section 64C(4) as they then read. Under a current reading, there appears to be a deemed dividend. The argument may be raised that there can be no dividend this year if the loan was made five years ago, because the event was five years ago. But loans do change from year to year and it is not impossible that, in the ordinary course, a loan will be repaid and re-advanced, so that the problem is real.

SARS/NT response:

No response.

SAICA’s further response:

We request that our comments be reconsidered as practical problems will be encountered that will affect the treasury operations in groups of companies.

10.4.4 Section 35A(9)
SAICA’s comment:

The Commissioner’s discretion in sub-section (9) should be subject to objection and appeal.

SARS/NT response:

"This comment is accepted."

SAICA’s further response:

Although our comment was accepted, the provision has not been amended. We therefore request that our comment be reconsidered.

10.4.5 Section 35A(11)
SAICA’s comment:

The obligation of the estate agent to inform the purchaser that the seller is a non-resident in terms of subsection (10) has no time restriction. The agent could for example inform the buyer only after payment has been made to the seller and the purchaser would still be required to pay the withholding tax. The estate agent’s obligation to inform the purchaser of the non-resident status of the buyer should thus be at the time of signature of the agreement of sale so that the purchaser is timeously aware of his obligations.

SARS/NT response:

"Consideration will be given to introduce a time limit."

SAICA’s further response:

Although it was stated that a time limit would be considered, this was not included in the Revenue Laws Amendment Act, 2004. We therefore request that further consideration be given to introducing a time limit in the 2005 amendments.

11. General

The amendment to section 45(4)(c) that was proposed in the draft Bill, was omitted from the final Bill and hence from the Act. This amendment must therefore be introduced in the 2005 amending legislation.

In SAICA’s submission a number of errors in the Explanatory Memoranda were pointed out but we note that these errors were not corrected, nor were the late changes to the Bills incorporated, in the final document. As the Explanatory Memoranda are relied upon when addressing legal interpretation issues in the future, and are also incorporated into the SARS Practice Manual, we strongly recommend that the documents be updated with all late changes in the process of promulgation of the Acts.

Compatibility of tax system to macro economic framework

We are pleased to note that the budget deficit is expected to be contained at 3,1% of GDP next year and is expected to decline to 2,7% the following year. We are also pleased that tax collections are expected to be maintained at 24,2% of GDP and government appears to be in control of macro-economic issues.

The challenge of our macro-economic framework is to ensure that the economic growth currently being experienced does benefit all. It is thus worth taking a view as to how the current tax system will contribute in removing the obstacles in achieving macro-economic goals:

Ensuring that economic growth accrues to all/redistribution of capital

It is an accepted principle that the markets alone cannot ensure that the economic cake is shared equally. Taking into account the history of apartheid South Africa, it becomes clear that the government, and hence our tax system has measures that are designed to re-distribute the economic wealth. Yet, government has mainly pursued its redistribution measures through the expenditure side of the budget by increasing the allocation of social expenditure, (social grants, education, health etc) and the tax system has not been used to achieve these goals.

The fact that the money allocated to social expenditure grows every year could be an indication that more and more people are beginning to rely on social grants as their permanent source of income. This situation could not have been the intention of government and should not be a permanent character of our tax system or spending pattern.

A review should be performed to determine how the current tax system achieves the aims of income re-distribution. It is now over 3 years since the capital gains tax (CGT) legislation was introduced into our tax system and, although it may still be early to tell, some work should be done to review how the CGT legislation aids or hinders wealth redistribution.

In order to ensure that the gap between the so-called "first "and "second" economies is bridged and the two economies integrated, our tax system should have specific incentives aimed at assisting fixed capital formation. To date, the focus has been on the transfer of capital, e.g. Black Economic Empowerment, however, there is little focus on capital formation.

The increased allocation for the land re-distribution process and the aid to emerging farmers is encouraging. However, it does not appear as if there is any urgency in assisting small farmers and the fact that the land re-distribution process has not been completed, 10 years into our democracy is a cause for concern.

Once people obtain title to land and are able to sustain themselves through farming and agriculture, the pressure on the government to increase social spending will be reduced. People can leverage their land and use it to obtain funding in order to build capital of their own.

Targeted tax system

Our tax system generally achieves horizontal equity. However, in an economy such as ours, which is characterized by gross inequalities in income, the government should review the ability of provinces to raise their own sources of revenue. Such a policy, if co-coordinated from central government and well implemented, could help our tax system to target or put in place measures aimed at assisting a specific sector of the population.

In the same manner that government can designate Industrial Development Zones or urban renewal incentives to certain cities, the government should identify certain nodes that are particularly affected by poverty or a lack of job opportunities and put in place specific tax incentive packages to assist those areas.

Regional development incentives

It is well noted that South Africa is the springboard for investment into Africa and that the success and growth of our economy depends on the success of the sub-Saharan region as a whole. Therefore, businesses should be encouraged to invest in the region as this would stimulate demand and consumption in our neighboring countries. Such demand would primarily be sourced from South Africa, hence increasing our exports. Our tax system could offer incentives for companies who risk their capital by undertaking huge capital investment projects in our neighboring African countries. Although these incentives will initially cost our fiscus, the long-term benefit, it is submitted, will outweigh the cost to the fiscus.

Tax system and economic growth

The country’s economic growth has little benefit if it does not result in improved standard of living for the majority of the population. Thus, economic growth that is characterized by a high level of unemployment and increased dependence on social support by the government is not good for our economy. Some of the ways that our tax system could be used to ensure that economic growth does actually result in an improved standard of living for all are discussed below:

Allowances for non-capital intensive industries

Our tax system generally grants incentives for capital investments through an assortment of capital allowances. However, most of the capital investment actually results in loss of jobs, mainly as a result of improved technology. The government, through its Expanded Public Works Programme seeks to reverse this trend by encouraging more labour intensive industries.

Private sector companies that also employ labour intensive methods and those in industries where there is less fixed capital investment required, e.g. services industries, tourism etc, should be granted tax allowances that are calculated not only on the amount invested, but in the number of new jobs created etc. This would assist in the development of human resources skills as well as increasing the numbers of people who are sustainably employed.

Tax incentives for small businesses

The current tax packages aimed at assisting small businesses are encouraging. However, these incentives do not take into account the plight of taxpayers or small business that are outside the tax net. It is submitted that there is a need to grant small businesses a limited amnesty in order to encourage them to be part of the formal economy.

A case in point would be the plight of taxi owners. The government is currently in the process of re-capitalizing and subsidizing the tax industry, which would result in taxi operators being formally registered and hence being monitored for tax purposes. It is well known that the industry was previously unregulated and, in the process, some of the taxi operators accumulated massive capital and wealth. In most cases, this wealth was previously untaxed. Such operators should be granted some form of tax amnesty e.g. based on assets accumulated, so as to help them to become part of the formal economy.

As demonstrated by the recent foreign tax amnesty, the benefits of such an amnesty would outweigh the cost to the fiscus.

Incentives for the rural based economy

Most of the tax incentives granted benefit only those who participate in the urban, formal economy. With the increase in the rate of urbanization, and hence the social burden on the tax system, e.g. increased housing and infrastructure required, the rural masses have, it is submitted been neglected.

As an example, many rural people, when building their houses, do not acquire bonds and the houses are not formally registered in the deeds office. The houses are often built over a long time, by individual savings. The rural people, as a result, do not benefit from national subsidies for housing and are not sufficiently economically literate to navigate the complex process required to obtain a housing subsidy.

We submit that specific packages should be developed in our tax system in order to target the rural economy and help its participants in accumulating capital.

Changes to the tax system

The current budget does not contain any fundamental changes to the tax system. This is a welcome reprieve considering the number of fundamental changes made to the tax system over the past four years. A review should now be undertaken to study the various implications of the recent changes on economic growth. This would, among other things, determine if there are any unintended consequences of recent tax changes. As an example, it would be interesting to know if capital gains tax legislation has resulted in the locking-in of capital, which would hamper the re-distribution aims of the government.

HIV/Aids

Lastly, but probably most importantly, we are concerned that there was no mention of HIV/Aids in the Budget. There are, in fact, a number of provisions in the Income Tax Act (the Act), that appear to be at cross purposes with the international fight against the HIV/AIDS pandemic. Although the view may be taken that the cost of fighting HIV/AIDS must be borne by companies, individuals and welfare organizations and is not a concern of tax policy, there is a counter-argument that all available resources must be targeted at fighting the devastating and widespread impact of the disease and government should take a proactive leadership role in the struggle against the pandemic. This commitment could be demonstrated by reviewing certain aspects of the Act to respond to changing circumstances in the light of the pandemic and the threat posed to the economy and society as a whole. Aspects of tax legislation and SARS practice that warrant review are listed below:

Employers’ contributions to funds: in practice SARS imposes a 20% limit for the purposes of section 11(l), which is becoming increasingly unrealistic;

Taxpayers may deduct donations to qualifying public benefit organisations (PBOs) but the deduction is limited to 5% of taxable income as calculated before taking into account this deduction. Furthermore, the deduction may not create or increase an assessed loss.

The requirements for the deduction of research and development expenditure in terms of section 11B are too restrictive to give effective relief for HIV/Aids-related research.

Employees who are placed on ill-health retirement are entitled to certain tax concessions in the form of an exemption and a provision allowing the taxable gratuity to be taxed at the average, rather than the marginal tax rate. However, the exemption is limited to R30 000 and the R30 000 limit has not been changed since 1984.

Medical expenses: Currently the only tax relief available for medical expenditure incurred by a person infected with HIV/AIDS is the deduction available in terms of section 18 of the Act. Unfortunately, the provisions of section 18 create a number of problems in the deduction of HIV/AIDS-related medical expenses. First, the section was promulgated almost 40 years ago, when medical treatment and family structures were very different to what they are now and well before the onset of the HIV/AIDS pandemic. As a result, the section is unnecessarily restrictive. Secondly, the section imposes a threshold under which no deduction is allowed.

In terms of the Fourth Schedule to the Income Tax Act, in determining the amount of employees tax to be withheld, an employer may not take an employee’s medical expenses into account if the employee is under the age of 65. The employee therefore gets no tax relief for this expenditure on a monthly basis and, at best, they have to wait until their tax return has been submitted and an assessment issued before getting any tax relief for medical expenses.