The following proposed tax changes were announced
- Income tax rates are left unchanged. The primary rebate was marginally increased but the overall effect of this is that individuals will pay R12.8 billion more in tax – the so called “bracket creep” which means you pay higher taxes as salary increases will put you into higher tax brackets.
- “Sin” taxes have all been increased with beer, wine, spirits and cigarettes going up on 1 April (see tables below). Indirect taxes will bring R2.3 billion into the fiscus in the 2019/20 tax year.
- The Sugar Tax will be increased to 2.21cents per gram up from 2.1 cents per gram.
- The new Carbon Tax will come into effect on 1 June this year – originally intended for 1 January but only passed in Parliament in February. The tax will have a three year phase-in and is primarily intended to fulfil South Africa’s pledge to reduce carbon emissions by 50% by 2030. It will mean substantial administration in affected industries such as engineering.
- A carbon levy will go into effect on 5 June and will be charged on the fuel price at 9 cents per litre.
- Micro Business Turnover Tax. There is a marginal decrease in the Small Business Corporation Tax.
The following taxes are unchanged
- Dividend tax at 20%
- Retirement savings contribution limit remains at 27.5% of income
- Capital Gains Tax at 18% for individuals, 22.4% for companies and 36% for trusts
- Company Tax at 28% and Trusts at 45%
- Transfer Duties, Tyre Levies, Plastic Bag Levy, Incandescent Light Levy and other Environment Levies
- All withholding taxes
- The Interest Exemption on Income Tax – R23,800 if you are under 65 and over 65 R34,800
- There is no change to the Medical Tax Credit as the country begins to phase in National Health Insurance.
Tables – Tax Changes Budget 2019