The following proposed tax changes were announced
- Income tax rates are left unchanged. The primary rebate was marginally increased but the overall effect of this is that individuals will pay R12.8 billion more in tax – the so called “bracket creep” which means you pay higher taxes as salary increases will put you into higher tax brackets.
- “Sin” taxes have all been increased with beer, wine, spirits and cigarettes going up on 1 April (see tables below). Indirect taxes will bring R2.3 billion into the fiscus in the 2019/20 tax year.
- The Sugar Tax will be increased to 2.21cents per gram up from 2.1 cents per gram.
- The new Carbon Tax will come into effect on 1 June this year – originally intended for 1 January but only passed in Parliament in February. The tax will have a three year phase-in and is primarily intended to fulfil South Africa’s pledge to reduce carbon emissions by 50% by 2030. It will mean substantial administration in affected industries such as engineering.
- A carbon levy will go into effect on 5 June and will be charged on the fuel price at 9 cents per litre.
- Micro Business Turnover Tax. There is a marginal decrease in the Small Business Corporation Tax.
The following taxes are unchanged
- Dividend tax at 20%
- Retirement savings contribution limit remains at 27.5% of income
- Capital Gains Tax at 18% for individuals, 22.4% for companies and 36% for trusts
- Company Tax at 28% and Trusts at 45%
- Transfer Duties, Tyre Levies, Plastic Bag Levy, Incandescent Light Levy and other Environment Levies
- All withholding taxes
- The Interest Exemption on Income Tax – R23,800 if you are under 65 and over 65 R34,800
- There is no change to the Medical Tax Credit as the country begins to phase in National Health Insurance.
Tables – Tax Changes Budget 2019
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.