Though he said nothing about the "super tax" that some had predicted for very high earners, he did announce a slew of tax adjustments that will ease the burden on low earners and take a little more from the rich.

Gordhan lopped R9.48-billion off the estimated tax bill of the 6.2million South Africans who pay personal tax. This will mainly compensate for "bracket creep", which is the effect of inflation-related wage increases on the percentage of earnings due in tax.

But to favour moderate earners over high earners, R7-billion of the relief will go to people earning up to R600000 a year and only R618-million will be returned to the 102050 people who report taxable earnings of over R1-million a year.

The Treasury added 28c to the cost of a litre of petrol by increasing the fuel and road accident fund levies, added 1c a kWh to the cost of electricity generated from non-renewable sources and Gordhan said he would skim 1% off the gross revenues of casinos and the lottery.

In exchange, he dropped last year's plan to tax gambling winnings of more than R25000.

In a blow to one sector of the leisure industry, Gordhan imposed a 10% tax on the value of motorboats and yachts more than 10m long.

The millions of South Africans who save through unit trusts and similar investments will in future pay a 15% tax on the dividends they earn on the stock market, but this will be largely compensated for by the abolition of the 10% secondary tax levied direct on companies.

Treasury tax specialist Frans Tomasek said the new scheme would not apply to pension funds, which would be exempt from the dividend tax.

SARS explained in a note that the higher dividend rate would penalise high net-worth individuals who tend to derive more of their income from investments, but the switch is still expected to cost the state R1.9-billion in lost revenue.

Gordhan also announced the first increase in a decade in the rate of capital gains tax payable on the increased value of investments.

The so-called inclusion rate - the portion of the increase in the value of an asset that is taxable - will rise from 25% to 33.3% for individuals and from 50% to 66.6% for companies and trusts. Tomasek said this would be offset by an increase in the thresholds above which it is payable, so only the wealthy were likely to feel the pain.

Investors will be allowed an annual non-taxable capital gain of R30000, up from R20000, and a non-taxable capital gain of up to R2-million on a primary home, which is up from R1.5-million.

He said the net effect would be that home owners would have to report a capital gain of over R3.5-million on a private residence.

Gordhan announced retirement and savings tax reforms. If the idea goes ahead, individuals are likely to be able to save up to R30000 a year tax free on interest, dividends and capital gains.

BUDGET BRIEFS

Little to cheer about for elderly, disabled

THERE was little for the elderly or the disabled to cheer about in yesterday's budget speech.

Pensioners over the age of 75 and people with disabilities will get a R60 increase in their monthly grant in the coming financial year. Finance Minister Gordhan said foster-care grants would increase by R30, to R770, and child support grant would go up to R280. - Sapa

Big victory for military veterans

FUNDING for the Department of Military Veterans will increase steadily over the next three years as it starts introducing social support for former combatants.

The estimates of national expenditure show that it plans to give 16000 veterans access to healthcare, provide pension and transport benefits to 15000 and supply 7000 with housing by 2014-2015. In the coming financial year, it plans to give 8000 pensions, 5000 housing and transport benefits, and 10000 healthcare. - Sapa

Bid to raise number of varsity graduates

THE Department of Higher Education will over the next three years focus on increasing the number of university graduates in scarce-skill areas.

Documents tabled with the budget show that its spending focus will be on its university education programme and national student financial aid scheme.

Finance Minister Pravin Gordhan said spending on education would grow from R207-billion in 2012-2013 to R236-billion in 2014-2015.

An additional R18.8-billion over the medium-term had been allocated to cover the equalisation of pupil subsidies for no-fee schools and increased access to Grade R, he said. - Sapa