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BUDGET 2016

 

Introduction

 Once more, income tax brackets have changed as have rates in all but the top two brackets.

 The following table illustrates the major changes that are proposed in the budget:

2015/2016

2016/2017

Taxable income (R)   Rates of tax

                Taxable income (R)   Rates of tax

0-181 900

18% of each R1

0-188 000

18% of each R1

181 901-284 100

R 32 742+26% of the amount above R181 900

188 001-293 600

R 33 840+26% of the amount above R188 000

284 101-393 200

R 59 314+ 31% of the amount above R284 100

293 601-406 400

R 61 296+ 31% of the amount above R293 600

393 201-550 100                    

R 93 135 + 36% of the amount above R393 200

406 401-550 100                    

R 96 264 + 36% of the amount above R406 400

550 101-701 300

R 146 619+ 39% of the amount above R550 1000

550 101-701 300

R 147 996+ 39% of the amount above R550 1000

701 301 and above

R 208 587+ 41% of the amount above R701 300

701 301 and above

R 206 964+ 41% of the amount above R701 300

Rebates

 

Rebates

 

Primary

R13 257

Primary

R13 500

Secondary

R7 407

Secondary

R7 407

Tertiary

R2 466

Tertiary

R2 466

Thresholds

 

Thresholds

 

Below age 65

R  73 650

Below age 65

R   75 000

Age 65 and over

R 114 800

Age 65 and over

R 116 150

Age 75 and over

R128 500

Age 75 and over

R129 850

Tax free interest

No Change

No Change

 

Below age 65

R23 800

Below age 65

R23 800

Age 65 and over

R34 500

Age 65 and over

R34 500

Medical Scheme Tax Credits

 For first two members                          R 286 (2015: R 270) per month

For each additional dependent          R 192 (2015: R 181) per month

 Turnover tax for micro business

 

2015/2016

 

2016/2017

Turnover

Rates of tax

Turnover

Rates of tax

R 0 R 335 000

0% of taxable turnover

R 0 R 335 000

0% of taxable turnover

R 335 001 R 500 000

1% of the amount above R 335 000

R 335 001 R 500 000

1% of the amount above R 335 000

R 500 001 R 750 000

 R 1 650 + 2% of the amount above

R 500 000

R 500 001 R 750 000

 R 1 650 + 2% of the amount above

R 500 000

R 750 000 R 1 000 000

R 6 650 + 3% of the amount above

R 750 000

R 750 000  and above

R 6 650 + 3% of the amount above

R 750 000

In our experience, very little use has been made of this method of taxation.

Transfer duty

Value of property

Rate

R0 R750 000

0.00%

R750 001 R1 250 000

3% on the value above R750 000, but not

exceeding R1 250 000

R1 250 001 R1 750 000

R15 000 plus 6% on the value above

R1 250 000, but not exceeding R1 750 000

R1 750 001 R2 250 000

R45 000 plus 8% on the value above

R1 750 000, but not exceeding R2 250 000

R2 250 001 -  R10 000 000

R85 000 plus 11% on the value above

R2 250 000

 

 

R10 000 000 and above

R937 500 plus 13% on the value above

R 10 000 000

Sin taxes

Product

Current rate

Proposed rate

Cigarettes pack of 20

R 13.94

R 14.76

Cigarette tobacco  per 50g

R 13.94

R 14.88

Pipe tobacco per 25g

R 3.89

R 4.16

Cigars 23g

R 64.96

R 69.28

Unfortified wine per litre

R 3.07

R 3.31

Fortified wine per litre

R 5.46

R 5.82

Sparkling wine per litre

R 9.75

R 10.54

Ciders and alcoholic fruit beverage per litre

R 3.65

R 3.97

Spirits per litre

R 149.23

R 154.48

Other proposal

n  A tyre levy of R 2.30 per kilogram of tyre mass. This will filter down to all sectors of the population. Effective 1 October 2016

n  An increase in the incandescent globe tax from R 4 to R 6 per globe. Effective 1 April 2016

n  An increase in plastic bag levy from 6 cents to 8 cents per bag. Effective 1 April 2016

n  An increase in the fuel levy of 30 cents per litre. Effective 1 April 2016    

n  An increase in the motor emissions tax. Effective 1 April 2016

n  Effective 1 April 2017, a method of taxing sugar sweetened beverages will be introduced.

n  The inclusion rate for capital gains is to be introduced. After deducting the increase annual exclusion of  R 40000, individuals will have to include 40% (previously 33.3%) of the gain in their taxable incomes. This will equate an effective rate of 16.4% for those in the maximum tax bracket. Companies and, although not specifically mentioned, trusts will be subjected to an 80% inclusion rate. This will equate to an effective rate of 22.4%.

n  Increasing tax collections in each of the next two tax years. No details of how this will be achieved have been announced.

n  A voluntary disclosure whereby, for a limited period of six months, non-compliant taxpayers can disclose their off-shore assets and income without fear of prosecution or penalties. It will be interesting to see the details of how this will be implemented and monitored.