2020 Budget Review

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.