Gordhan's new tax incentives - Times LIVE
Fri May 26 03:50:23 SAST 2017

Gordhan's new tax incentives

Jan-Jan Joubert | 2016-02-24 14:10:28.0

Image by: Sunday Times

In a major surprise‚ finance minister Pravin Gordhan has not raised income or value-added tax‚ preferring to inject state revenue from user-based taxes.

Gordhan left the income tax levels at the highest end of the scale unchanged at 41%‚ while providing tax relief of R5.5 billion to lower and middle-income earners.

In total government‚ which is facing a R4 billion revenue collection shortfall this year‚ will attempt to raise an extra R18 billion in tax collection.

This will be gained from - An increase of 30 cents per litre in the general fuel levy;

- The introduction of a tyre levy at R2.30 per kilogram of tyre to finance recycling projects;

- Increases of between 6 and 8.5 percent in the duties on alcoholic beverages and tobacco products.

- The introduction of a tax on sugar-sweetened beverages;

- Increasing the incandescent globe tax from R4 to R6 per globe‚ to get consumers to switch to more efficient compact fluorescent bulbs;

- Increasing property transfer duties of 13% for ultra-rich buyers of R10-million properties;

- Increasing the plastic bag levy from 6 cents to 8 cents per bag; and

- Increasing the motor vehicle emissions tax;

- Increasing the inclusion rate for capital gains tax to 40% for individuals and to 80% for companies.

Wouter Fourie‚ the Financial Planning Institute’s Financial Planner of the Year 2015‚ had predicted the capital gains tax change‚ but the corporate rate came in higher than he thought.

He had forecast the higher inclusion rate for individuals to change from 33.3% up to 40%‚ and the Companies and Trust to rise from 66.6% to 70%.

Good news for brandy and sparkling wine drinkers is that government proposes a 10% lower excise duty on pot-stilled and vintage brandy‚ and pegging the sparkling wine excise rate at 3.2 times that of unfortified wine.

Old age‚ disability and care dependency grants will rise by R80 to R1‚500 in April 2016‚ and by a further R10 to R1‚510 in October.

The child support grant will rise by R20 to R350 in April and the foster care grant by R30 to R890.

(Additional reporting by Ray Hartle and staff reporter)

- TMG Digital/TMG Parliamentary Bureau


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