The wealthiest South Africans 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 – compared to 41% previously - going to the state to help with service delivery and alleviation of the plight of the poor.
- LIVE: Pravin Gordhan delivers 2017 BudgetA politically "vulnerable" Pravin Gordhan will deliver what could be his last Budget speech today - and he is expected to make an announcement on tax increases that could make everyday lives more difficult.
Finance minister Pravin Gordhan revealed in his budget speech on Wednesday that SARS had‚ for the first time ever‚ failed to reach its tax revenue target‚ falling short of the required amount by R30 billion.
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Rather pointedly‚ Gordhan failed to thank or even mention SARS commissioner Tom Moyane - with whom he has had a long and bitter feud - at all 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 9 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.
Whereas no transfer duty is currently 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 increased to R33‚000‚ and there will be an increase in the medical tax credit.
More clarity on how carbon tax will be introduced will be given later this year‚ as will measures to combat tax avoidance by multinational companies.
-TMG Digital/TimesLIVE
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