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What does budget 2019 mean for you?

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The following proposed tax changes were announced

  • Income tax rates are left unchanged. The primary rebate was marginally increased but the overall effect of this is that individuals will pay R12.8 billion more in tax – the so called “bracket creep” which means you pay higher taxes as salary increases will put you into higher tax brackets.
  • “Sin” taxes have all been increased with beer, wine, spirits and cigarettes going up on 1 April (see tables below). Indirect taxes will bring R2.3 billion into the fiscus in the 2019/20 tax year.
  • The Sugar Tax will be increased to 2.21cents per gram up from 2.1 cents per gram.
  • The new Carbon Tax will come into effect on 1 June this year – originally intended for 1 January but only passed in Parliament in February. The tax will have a three year phase-in and is primarily intended to fulfil South Africa’s pledge to reduce carbon emissions by 50% by 2030. It will mean substantial administration in affected industries such as engineering.
  • A carbon levy will go into effect on 5 June and will be charged on the fuel price at 9 cents per litre.
  • Micro Business Turnover Tax. There is a marginal decrease in the Small Business Corporation Tax.

The following taxes are unchanged

  • Dividend tax at 20%
  • Retirement savings contribution limit remains at 27.5% of income
  • Capital Gains Tax at 18% for individuals, 22.4% for companies and 36% for trusts
  • Company Tax at 28% and Trusts at 45%
  • Transfer Duties, Tyre Levies, Plastic Bag Levy, Incandescent Light Levy and other Environment Levies
  • All withholding taxes
  • The Interest Exemption on Income Tax – R23,800 if you are under 65 and over 65 R34,800
  • There is no change to the Medical Tax Credit as the country begins to phase in National Health Insurance.

Tables – Tax Changes Budget 2019