In a surprise move Minister Mboweni made no dramatic tax proposals to balance the books in his budget speech on Wednesday. In fact, a number of proposals will actually reduce personal income tax, and, in the longer term, corporate taxes could be reduced.
The budget highlights are as follows:
Personal income tax
• Relief through an above inflation increase in the brackets and rebates.
Medical tax credits
• Increase in medical credits.
Foreign remuneration exemption
• Exemption will be limited to R1.25m from 1 March 2020.
Corporate interest on debt
• Deductions to be limited to combat base erosion and profit shifting.
Corporate assessed losses
• Offset against taxable income limited to 80% of taxable income.
Fuel levy
• Increased by 25c/litre:
• 16c/litre increase in the general fuel levy
• 9c/litre increase in the RAF levy
Tax-free savings investments
• Annual contribution limit increased to R36 000.
Excise duties
• Alcohol and tobacco duties increased by between 4.4 and 7.5 per cent.
Transfer duty
• Brackets will be adjusted for inflation from 1 March 2020.
Carbon tax
• Rate will increase from R120 per tonne to R127.
Plastic Bag Levy
• Proposal to raise the levy 25 cents per bag effective 1 April 2020.
This summary was provided by Profmark.
To discuss the implications of the budget speech on your affairs, contact your local Moore firm.