Minister of Finance, Pravin Gordhan, must have faced a tough time balancing a National Budget in these times of slow economic growth coupled with a myriad of other challenges including the implementation of the National Health Insurance. However what was revealed in the 2013 budget speech should be pleasing for most South Africans and businesses alike.
While deemed conservative, the budget did utilise the National Development plan as its point of departure, harnessing its support from all South Africans as a vehicle to move the country forward.
In this blog, we will look at some of the highlights of the 2013 budget speech in South Africa, how they affect you as a taxpayer and also what effect they have on your business.
2013 Budget Speech Highlights
There was good news for individual taxpayers in these tough economic times as the budget included tax relief of R7 billion.
This means that as a taxpayer, you will only start paying tax at an annual income of:
- R67 111 (R63 556 in the previous year) for taxpayers below 65 years
- R104 611 (R99 056 in the previous year) for taxpayers 65 to 74 years
- R117 111 (R110 889 in the previous year) for taxpayers over 75 years
If your taxable income is from a single employer only and is not in excess of R250 000 for the 2012 / 2013 tax year, you will not be required to submit tax returns.
Medical scheme contributions
More good news, the monthly tax credits for medical scheme contributions has been increased from R230 to R242 for the first two beneficiaries on a scheme and then from R154 to R162 for every additional beneficiary. This applies to 2013/14 and equates to a saving on your overall tax payable if you make use of a Medical Aid.
If you do indulge and have been waiting for this section with bated breath, I’m afraid there is not good news here as excise duties on alcohol and tobacco products are set to rise again between 5% and 10%.
- A pack of 20 cigarettes will now include tax of R10.92 (increased by 60c)
- A 750ml bottle of spirits will now include tax of R39.60 (increased by R3.60)
- A 340ml can of beer will now include tax of R1.08 (increased by 7.5c)
The South African public has been hit hard with fuel increases recently and the subsequent rise in cost of other products as a result. There is no rest from this, as the general fuel levy will rise by 15c per litre to R2.13 on 3rd April 2013. There is also an increase in the levy for the Road Accident Fund, which rises by 8c per litre to 96c per litre of fuel.
If you still aren’t packing environmentally friendly, reusable bags to carry your shopping, then you will notice a rise on plastic shopping bags from 4c to 6c starting 1st April 2013.
Tax relief for small business
There has been further tax relief provided for small business. This included an increase in the monetary tax thresholds applicable for small business corporations.
All in all, the 2013 Budget Speech in South Africa has received a positive response from taxpayers and business alike. Pravin did however warn against those avoiding tax and enjoying the country’s infrastructure and resources without paying their fair share of costs. If you feel your tax has not been completed correctly or you want to end a history of tax avoidance, contact Brett today on 021 421 4444 for friendly, practical advice and guidance.