How does the Budget Speech affect you or your business?
On 21 February 2018, Finance Minister Malusi Gigaba delivered his 2018 Budget Speech.
Hereby a summary of the most significant proposals for the 2018/2019 Budget as tabled by the Minister of Finance:
2018/2019 Tax Proposals:
VAT: A one percentage point (1%) increase in VAT from 14% to 15%.
No adjustments to the top four income tax brackets. Below inflation adjustments to the bottom three income tax brackets were proposed.
Fuel Levies: Overall increase of 52c/litre for fuel, consisting of a 22c/litre increase in the general fuel levy and 30c/litre increase in the Road Accident Fund levy, effective 4 April 2018.
Luxury Goods Tax: Increase in the ad-valorem excise duties rate on luxury goods from 7% to 9% effective 1 April 2018.
Estate Duty Tax: Increased estate duty, to be levied at 25% for estates above R30 million, effective 1 March 2018. This is a 5% increase.
Capital Gains and Dividend Tax: The capital gains tax rate for individuals remains unchanged at 18%, while the dividends tax rate remains unchanged at 20%.
Medical Tax Credits: The medical tax credits will increase from R303 to R310 per month for the first two beneficiaries (2.3% increase), and from R204 to R209 per month for the remaining beneficiaries (2.5% increase).
Sin Tax: Excise duties on tobacco products will increase by 8.5% and on alcohol by 6-10%.
Environmental & Health Tax: Increases in the plastic bag levy, the motor vehicle emissions tax and the levy on incandescent light bulbs to promote eco-friendly choices.
Transfer Duty fees: There are no changes to the transfer duty fees.
Social Grants: General increase across all social grants.