Grin and bear it
LITTLE ROOM TO MOVE FOR GORDHAN AS HE DELIVERS BUDGET WITH NO CHEER GOVERNMENT DEBT GOES UP A SHOCKING R2.2-TRILLION POLICE SET TO SHED 3 000 JOBS
THE wealthiest will pick up the tab for the South African Revenue Service’s inability to outstrip economic growth in revenue collection.
The richest South Africans – those with earnings above R1.5-million per year – will find themselves in a new tax bracket, with 45% of their income going to the state to help with service delivery and alleviation of the plight of the poor.
Finance Minister Pravin Gordhan revealed in his budget speech yesterday that the SA Revenue Service had, for the first time ever, failed to reach its tax revenue target, falling short of the required amount by R30-billion.
Rather pointedly, Gordhan failed to thank or even mention Sars commissioner Tom Moyane – with whom he has had a long and bitter feud – in his speech. The main tax proposals are: A new top personal income tax of 45% for those with taxable incomes above R1.5-million per year;
An increase in the dividend withholding tax from 15% to 20%;
Limited bracket creep relief, increasing the tax-free threshold from R75 000 to R75 750 taxable income per year;
An increase of 30 cents a litre in the general fuel levy, and nine cents a litre in the Road Accident Fund levy; and
Increases in the excise duties for alcohol and tobacco of between 6% and 10%.
Tax relief will be provided in the affordable housing market through an increase in the threshold above which transfer duty is paid.
Currently, no transfer duty is paid on acquired property worth below R750 000, in future no transfer duty will be paid on property worth less than R900 000.
The annual allowance for tax- free savings will be up to R33 000, and there will be an increase in medical tax credit.
More clarity on the introduction of carbon tax and measures to combat tax evasion by multinational companies will be given later in the year.