Budget 2017: Tax Changes

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BUDGET 2017: TAX CHANGES

The 2017 budget lived up to the expectation created by the Finance Minister with the medium term budget policy statement late last year in which it was made clear that R28bn in additional tax revenue must be generated.

Tax increases were announced as follows:

  • Introduction of top marginal tax rate of 45% on personal taxable income above R1 500 000;
  • Increase in tax rate applicable to trusts (excluding special trusts) from 41% to 45%;
  • In consequence of increased top marginal rate ...
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NON-EXECS, PAYE AND VAT: SARS PROVIDES CLARITY

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Historically, it was unclear whether amounts paid to a non-executive director were subject to the deduction of employees’ tax and whether the prohibition against certain deductions by salaried employees applied to them. This being as a result of a non-executive directors arguably not earning remuneration as defined in the 4th Schedule to the Income Tax Act. No. 58 of 1962 (“the Act”)

This uncertainty further extended into the application of proviso (iii) to the definition of an “enterprise” as contained in ...

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New Financial Developments in the Pipeline after the Budget Speech

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1. Outward Remittances

The Government is well aware of how expensive it is to remit funds abroad from South Africa. In response, Treasury will conduct some reforms, to apply, which, together with more competition and exemptions in the Financial Intelligence Centre Act (2001), should hopefully reduce the compliance burden for low-risk remittances and bring lower charges.

2. Financial Surveillance Manual

The current Reserve Bank will publish a simplified financial surveillance manual on its website in ...

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Medical Aid Rates Increase 2016

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It is that time of the year again when Medical Aid Schemes are releasing their premium rates for the 2016 calendar year. In a comparison, conducted by Remuneration Consultants South Africa, the 2015 and 2016 contribution rates of seven of the most prominent Medical Aid Companies in South Africa revealed an on average contribution rate increase between 7.26% and 10.92%. The graph below ranks the seven Medical Aid Schemes from the highest to the lowest increase.
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Medium Term Budget Statement

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Whilst political opportunism, some would argue, delayed the Minister of Finance, Nhlanhla Musa Nene, from delivering his medium term budget statement in parliament in October 2015, the Minister eventually had an opportunity to address parliament. Amidst the building chaos outside of the parliament building and the weakening rand, the Minister announced a few important and interesting tax related matters. Click here for a summary and our comments.
Medium term budget statement – tax essentials synopsis

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Nhlanhla Nene’s 2015 Budget speech

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Honourable Speaker

I have the honour to present the first budget of our fifth democratic Parliament.

Members of the House, and fellow South Africans. Over the past twenty years we have built houses, delivered water and electricity, improved access to schools and health care. Yet there are people living in shacks, there are schools without sanitation, there are patients without care.

We have made progress in dismantling apartheid divisions. Yet there are still fault-lines across our social landscape. We have agreed on a ...

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Foreign Withholding Taxes

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South African and multinational businesses operating in the larger African continent were elated by the introduction in 2011 of the section 6quin relief for withholding taxes suffered despite the treaty provisions preventing same.

The elation, however, may be short lived! After offering much welcomed relief and promoting the gateway to Africa initiative for a mere 4 odd years, it is currently proposed that the relief be withdrawn.

While several commentators have pleaded with Treasury not to withdraw the relief, we are ...

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In Which Countries Do People Pay The Most Tax?

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Income tax is a constant source of controversy and debate, no matter what country you live in. “Should 5% appear too small, be thankful I don’t take it all … You’re working for no one but me,” sang the Beatles in their 1966 hit Taxman, in an attack on the then Labour government’s high tax rates.

The amount of income tax you pay varies wildly between countries, from almost 60% for high earners in certain countries to 0% in some offshore ...

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