The month of February is earmarked for tax with the announcement of the Annual National Budget definitely the highlight that everybody is always anxiously waiting to hear. These are a few highlights that might impact on you as an individual:
- On 1 April 2018 the Value-Added Tax rate (VAT) will increase from 14% to 15%. This will definitely have the biggest impact on all consumers in South Africa. Almost every line on your expense budget will have to be adjusted for this increase.
- The General Fuel Levy will increase by 22 cents per litre and the Road Accident Fund Levy will increase by 30 cents per litre effective from 4 April 2018.
- Personal income tax had limited changes with no adjustments to the top four income tax brackets and below inflation adjustments to the bottom three brackets and to the primary, secondary and tertiary tax rebates.
- The medical scheme fees tax credit will be slightly increased from R303 to R310 per month for the first two beneficiaries and from R204 to R209 per month for the remaining beneficiaries.
- Estate Duty rate increases from 20% to 25% for estates exceeding R30 million.
- Donation Tax rate increases from 20% to 25% for donations exceeding R30 million.
- South Africa is going green with the announcement of increases in the plastic bag levy, the motor vehicle emissions tax and the levy on incandescent light bulbs to promote eco-friendly choices.
- A 6% to 10% increase in excise duties on alcoholic beverages and an 8.5% increase in duties on tobacco products were announced.
- From 1 April 2018 a health promotion levy will be introduced, which taxes sugary beverages.
Overall the budget for the 2018 / 2019 tax year is considered to be a well-balanced budget which gives South Africans a glimpse of hope despite all the negativity; as the Minister of Finance rightfully mentioned. The general feeling is that the budget projections will prevent Moody’s Investors Service to downgrade South Africa’s sovereign rating even further, which surely is good news.
Written by Ronel Jooste
CA(SA), Financial Consultant and Coach, Blogger and Speaker
Contact Ronel: firstname.lastname@example.org
For more information about my financial wellness programmes visit the website