With South Africa experiencing low economic growth, high unemployment, slow progress in education and uneven income growth, it was only expected that our finance minister Pravin Gordhan would need to make tough decisions in his 2017 budget.

While many of these tougher measures span the full scope of the budget, we will be purely focusing on the some of the highlights that may affect you as an individual. While some areas may be difficult to swallow, there is definitely still a scattering of good news:

Personal Income Tax – New bracket

There is bad news for any high earners. An additional taxation bracket has been added for the wealthy of South Africa. Anyone earning over R1.5 million rand per annum will now be taxed at 45%  (which is up 4% compared to the previous top level of 41%).

Property Market – Transfer Costs

One of the positives of the 2017 budget was the increase in the tax free limit on property purchases. Any property you purchase from the 1st of March 2017 will have the first R900 000 taxed at zero percent. This is up from the previous amount of R750 000 and should be welcomed by anyone in, or looking to enter into the property market.

Fuel levy Increases

By now motorists are likely numbed to the ever increasing fuel price. So it should come as little surprise that the general fuel levy will increase by 30c per litre on April 5th 2017, bringing it to a total of R3.15 per litre of petrol and R3.00 per litre of diesel. On this same date the amount for the road accident fund will increase by 9c per litre of petrol and diesel.

Sin Taxes

Brace yourself for more increases on alcohol and tobacco:
Beer: 12c per 340ml
Ciders and alcoholic fruit beverages: 12c per 340ml
Cigarettes: 106c per packet of 20
Cigarette tobacco: 119c per 50g
Cigars: 658c per 23g
Fortified wine: 26c per 750ml
Pipe tobacco: 40c per 25g
Sparkling wine: 70c per 750ml
Spirits: 443c per 750ml
Unfortified wine: 23c per 750ml

Sugar Tax – Implementing soon

A sugar tax is set to be implemented as soon as the necessary legislation is approved. The taxation rate will be 2.1c per gram of sugar content above 4g per 100ml.

Carbon Tax – Revised Bill

Towards the middle of 2017, a revised Carbon Tax Bill will be published for public consultation and tabling.

Social Grant Increases

There were numerous increases under social grants which are detailed below:
Care dependency grants increased from R1 505 to R1 600
Child support grants shifted from R355 to R380
Foster care grants rose from R890 to R920
Disability grant changed from R1 505 to R 1 600
State old age grant saw an increase from R1 505 to R 1 600 per month
State old age grant for over 75s increased from R1 525 to R1 620
War veterans grant rose from R1 525 to R 1 620

Should you have any questions on how these changes will affect you or your business, be sure to reach out to Dirmeik Consulting on:

Cape Town: 021 421 4444,
Johannesburg: 010 007 3026,
Durban: 031 007 0881