What’s going up, what stays same
No increases to a number of taxes
Income tax is down by R2bn, and VAT stays the same at 15% – that’s the headline news from the budget.
But you will pay more for your transport costs and your vices, finance minister Tito Mboweni’s budget reveals.
However, there are no increases to a host of taxes, from dividends tax to capital gains tax and estate duty.
Furthermore, if you’re buying a property to live in or to let, you will not pay transfer duty on property up to the value of R1m, and if you contribute to a tax-free savings account or investment, the annual contribution limit has increased from R33,000 to R36,000.
There will be no changes to the following taxes: Dividends tax. Dividends
● earned from any share you own will still be taxed at a rate of 20%.
Interest exemptions. They remain
● at R23,800 for individuals under the age of 65 and
R34,500 for individuals aged 65 and over.
Retirement fund contributions
● remain at 27.5% of your taxable income or remuneration up to R350,000.
Capital gains tax inclusion
● rates and exemptions. The effective rates remain at 18% for individuals and special trusts, 24% for companies and at 36% for other trusts. The annual exclusion for individuals remains at R40,000.
Estate duty. The rate remains
● at 20% on the first R30m and 25% on estates over R30m with a basic deduction of R3.5m.
Donations tax. The rate remains
● 20% of property under R30m and 25% of property over the value of R30m. The first R100,000 is exempt.
Companies tax remains at
●
28%.
Lump sum retirement fund
● withdrawal and severance benefits. The first R500,000 is tax free and thereafter tax is applied on a sliding scale at rates ranging from 18% to 36%.
Slight changes were made to the following tax deductions: Subsistence allowances: if
● you are away from home on business for at least one night and you receive a subsistence allowance or an advance from your employer for costs, you can now deduct R452 a day (up from R435) for meals and incidental costs.
That means you won’t pay tax on that amount paid to you. If your meals are paid for by your employer, you can deduct up to R139 a day for incidental costs (up from R134 a day).
Small business tax has been adjusted to be in line with the tax threshold for individuals. A small business earning R83,100 a year will not pay any tax.