Cape Town - Finance Minister Pravin Gordhan delivered his last National Budget speech for the current administration, but how does it affect you?
6cents, part of Summit Financial Partners, lists the top three changes that you should take note of:
1. Tax brackets
There was good news for low income earners, as the income tax rate has been reduced for South Africans earning R250 000 or less. For example, if you have an annual income of R250 000:
- In 2013, you would have paid tax of R38 828
- In 2014, you will only pay R37 555
- That means a tax saving of R1 273 in the 2014 season.
The tax threshold has also increased from R67 111 to R70 700, which means that only South Africans earning over R70 700 per annum will now have to pay taxes.
2. Retirement fund lump sums
One of the most significant changes in the 2014 budget speech is the huge increase in the tax-free retirement lump sum portion from R315 000 to R500 000.
This means that you can now withdraw a lump sum of up to R500 000 from your retirement fund without paying tax.
3. Sin tax and fuel levy
There is some bad news as well - many of the things you enjoy will be costing you more, specifically:
- 9c more per 340ml beer or cider
- 27c more per 750ml bottle of wine
- 68c more per pack of cigarettes
- R4.80 more per bottle of whiskey
Sadly, despite e-tolls and increasing fuel rates, as of April 2 2014, you will also be paying 20c extra per litre towards the general fuel levy and road accident fund.
See a more detailed infographic.
6cents, part of Summit Financial Partners, lists the top three changes that you should take note of:
1. Tax brackets
There was good news for low income earners, as the income tax rate has been reduced for South Africans earning R250 000 or less. For example, if you have an annual income of R250 000:
- In 2013, you would have paid tax of R38 828
- In 2014, you will only pay R37 555
- That means a tax saving of R1 273 in the 2014 season.
The tax threshold has also increased from R67 111 to R70 700, which means that only South Africans earning over R70 700 per annum will now have to pay taxes.
2. Retirement fund lump sums
One of the most significant changes in the 2014 budget speech is the huge increase in the tax-free retirement lump sum portion from R315 000 to R500 000.
This means that you can now withdraw a lump sum of up to R500 000 from your retirement fund without paying tax.
3. Sin tax and fuel levy
There is some bad news as well - many of the things you enjoy will be costing you more, specifically:
- 9c more per 340ml beer or cider
- 27c more per 750ml bottle of wine
- 68c more per pack of cigarettes
- R4.80 more per bottle of whiskey
Sadly, despite e-tolls and increasing fuel rates, as of April 2 2014, you will also be paying 20c extra per litre towards the general fuel levy and road accident fund.
See a more detailed infographic.