Lloyd Viljoen Budget Summary
LLOYD VILJOEN
BUDGET SUMMARY AND MAIN TAX PROPOSALS
FEBRUARY 2015
INTRODUCTION
MAIN TAX PROPOSALS
Nominal gross tax revenue for 2013/14 amounted to R900 billion, a 10.6 per cent or R86.2 billion increase from the prior year.
The 2014 Budget projected 10.5 per cent growth in tax revenues for 2014/15. This has been revised down to 8.8 per cent, reflecting weaker-than-expected economic growth.
The 2015 tax proposals reflect government’s commitment to stabilise the fiscus, while ensuring that the tax system remains fair, efficient and progressive.
The main proposals are to raise personal income tax rates for all but the lowest tax bracket by one percentage point.
Government proposes to increase the general fuel levy by 30.5 c/litre. At the same time, the RAF levy, used to finance third-party motor vehicle personal accident claims, will be increased by 50 c/litre to support the RAF. It is proposed that these increases become effective on 1 April 2015.
Reforms will improve the turnover regime for small business and support greater energy efficiency.
Increases in excise duties on alcoholic beverages and tobacco products are proposed, adding 7 cents to the price of a 340ml can of beer and 82 cents to a packet of 20 cigarettes. Whisky goes up by R3.77 a bottle. These increases take effect immediately.
Individual tax tables
2015/16
2014/15
Taxable income (R)
Rates of tax
Taxable income (R)
Rates of tax
0 – 181,900
18% of each R1
0 – 174,550
18% of each R1
181,901 – 284,100
R32,742 + 26% of the amount above R181,900
174,551 – 272,700
R31,419 + 25% of the amount above R174,550
284,101 – 393,200
R59,314 + 31% of the amount above R284,100
272 701 – 377,450
R55,957 + 30% of the amount above R272,700
393,201 – 550,100
R93,135 + 36% of the amount above R393,200
377,451 – 528,000
R87,382 + 35% of the amount above R377,450
550,101 – 701,300
R149,619 + 39% of the amount above R550,100
528,001 – 673,100
R140,074 + 38% of the amount above R528,000
701,301 and above
R208,587 + 41% of the amount above R701,300
673,101 and above
R195,212 + 40% of the amount above R673,100
Rebates
Rebates
Primary
R13,257
Primary
R12,726
Secondary >65
R7,407
Secondary >65
R7,110
Secondary >75
R2,466
Secondary >75
R2,367
Tax threshold
Tax threshold
Below age 65
R73,650
Below age 65
R70,700
Age 65 to 74
R114,800
Age 65 to 74
R110,200
Age 75 and over
R128,500
Age 75 and over
R123,350
MEDICAL TAX CREDITS
Monthly medical scheme contribution tax credits will, from 1 March 2015, be increased from R257 to R270 per month for the first two beneficiaries and from R172 to R181 per month for each additional beneficiary.
TRANSFER DUTIES
Average house prices have recovered slowly over the past two years following a post-2009 decline. The rates and brackets for transfer duties on the sale of property on or after 1 March 2015 will be adjusted to provide relief to middle-income households. The new rates will eliminate transfer duty on all property acquired below R750 000, decrease effective transfer duty liability for properties acquired up to about R2.3 million and increase liability for properties above this amount.
Transfer Duty Rate adjustments
2015/16
2014/15
Property value (R)
Rates of tax
Property value (R)
Rates of tax
0 – 750,000
0% of property value
0 – 600,000
0% of property value
750,001– 1,250,000
3% of property value above R750,000
600,001– 1,000,000
3% of property value above R600,000
1,250,001 – 1,750,000
R15,000 + 6% of property value above R1,250,000
1,000,001 – 1,500,000
R12,000 + 5% of property value above R1,000,000
1,750,001 - 2,250,000
R45,000 + 8% of property value above R1,750,000
1,500,001 +
R37,000 + 8% of property value above R1,500,000
2,250,001+
R85,000 + 11% of the amount above R2,250,000
DIESEL REFUNDS
The diesel refund system allows for a refund of all or part of the fuel levies to producers in the agriculture, forestry, fishing and mining sectors. The administrative system in place since 2000 faces significant technical problems and legal challenges. Some eligible firms are unable to benefit from the system, while others appear to be making disproportionate refund claims. To address these concerns, government proposes to delink diesel refunds from the VAT system from 1 April 2016. The National Treasury and SARS will explore alternative, more equitable rules and administrative procedures after consultation with the affected industries.
WHO PAYS THE TAXES
Taxable Bracket
Registered Individuals
Income Tax Payable
Number
%
R Billion
%
0 - 70,000
8,435,314
54.6%
0
0
70,001 – 150,000
2,725,505
17.6%
12.7
3.2
150,001 – 250,000
1,747,426
11.3%
35.2
8.9
250,001 – 350,000
1,080,762
7.0%
49.1
12.5
350,001 – 500,000
687,085
4.4%
56.9
14.4
500,001 – 750,000
429,454
2.8%
65.3
16.6
750,001 – 1,000,000
164,738
1.1%
41.8
10.6
1,000,001 – 1,500,000
110,686
0.7%
43.4
11.0
1,500,000 +
78,543
0.5%
89.4
22.7
Total
15,459,513
100.0
393.9
100.0
Randpark Building, 20 Dover Street, Randburg ? 011 787 5723 ? info@lloydviljoen.co.za
