Budget offers tax relief surprise

2013-02-27 17:32 - Jaco Leuvennink
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ape Town - One of the surprises of Wednesday's Budget Speech was the room found for personal tax relief of R7bn amid what Finance Minister Pravin Gordhan called “a revenue squeeze.”

No significant tax increases were announced, but a review of the tax system will be conducted in the course of the year, as recently announced by President Jacob Zuma in his state of the nation address. The chairperson of the tax committee that will be in charge of this review will be Judge Dennis Davis.

Drinkers and smokers will as usual be charged more for their habits.

The so-called sin taxes, excise duty plus VAT, have been raised by between 5.5% and 10%.

Consumers will pay 60c more for a packet of 20 cigarettes, 32c more for 25g of pipe tobacco, R3.60 more for a bottle of 750ml of spirits, 56c more for a 750 ml bottle of sparkling wine, 19.5c more for a 750 ml bottle of wine and 7.5c more for a 340 ml can of beer.

Tax on individuals, which brings in 34% of government revenue, has been adjusted to counter bracket creep in all income categories.

Calculate how much less you owe the tax man.

The primary rebate for all individuals has been raised from R11 440 to R12 080, the secondary rebate for those 65 to 74 years old from R6 390 to R6 750 and the tertiary one for ages 75 and above from R2 130 to R2 250.

An individual earning R200 000 per year will now pay R1 032 less per year. It climbs to R3 015 less for those earning R750 000 or more.

Fuel prices will also rise on April 3 this year by 23c per litre due to the general fuel increase of 15c to R2.13 and the Road Accident Fund levy’s rise of 8c to 96c/l.

The levy on plastic bags has also been raised from 4c to 6c per bag.

Other main tax proposals are reforms to the tax treatment of contributions to retirement savings; an employment tax incentive for young work seekers; tax relief for small businesses; alignment of the proposed carbon tax, energy efficient savings tax incentive and the electricity levy; and that foreign businesses selling goods digitally in SA will have to register as VAT vendors.

 - Fin24

* Visit our 2013 Budget section for full coverage of Finance Minister Pravin Gordhan's National Budget speech.


 

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