The Minister of Finance has once again delivered his budget speech, and once again, the ordinary tax paying South African is left wondering, ‘but how does this affect me?’
Personal Income Taxes
It may be the case that you will end up paying the same taxes as before, more taxes, or less taxes.
The good news is that if you earn less than R1,5 million, you will be paying the same amount of tax as before. The bad news is that if you pay more than R1,5 million a year, you will be paying more taxes. The new tax rate for those earning more than R1,5 million will be 45%. (Don’t panic and think that you will be paying a full 45% of your income. You should make an appointment with a tax consultant to find out more about the ‘effective tax rate’. )
Some have complained that they are paying too much tax. The truth of the matter is that the country does not have enough money to spend on services so you will probably not see a decrease in taxes for quite a while.
If you are driving a car, you might end up paying more for petrol. If you take a taxi or bus, you might also end up paying more for fares.
The fuel levy will increase by 30 cents a litre and the Road Accident Fund fuel levy will increase by 9 cents a litre.
If you are invested in publically traded shares or in unit trusts with a share component, the dividend withholding tax rate will increase from 15% to 20%.
Buying a new home
If you are in the market to buy a new house, you’ll be happy to know that if the property costs less than R900000, then you won’t have to pay any transfer duties.
Alcohol and tobacco
You will be paying more if you are a consumer of alcohol and/or tabacco. Taxes on alcohol and tobacco will increase as follows:
- Beer increases by 12 cents for every 340ml;
- Fortified wine increases by 26 cents for every 750ml;
- Ciders and alcoholic fruit beverages increases by 12 cents for every 340ml;
- Unfortified wine increases by 23 cents for every 750ml;
- Sparkling wine increases by 70 cents for every 750ml;
- Spirits increases by R4.43 for every 750ml;
- Cigarettes increases by R1.06 for every packet of 20;
- Cigarette tobacco increases by R1.19 for every 50g;
- Pipe tobacco increases by 40 cents for every 25g; and
- Cigars increases by R6.58 for every 23g
For those depending on social grants, the following increases might bring some relief:
- Old age grants increases from R1505 to R1600 per month;
- Ald age grants for those over the age of 75 increases from R1525 to R1620;
- War veterans grants increases from R1525 to R 1620;
- Disability grants increases from R1505 to R 1600;
- Foster care grants increases from R890 to R920 ;
- Care dependency grants increased from R1505 to R1600; and
- Child support grants increases from R355 to R380