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The Minister of Finance, Tito Mboweni, delivered South Africa’s 2019 Budget speech to Parliament on 20 February 2019. In the 2019 Budget review tax amendments have been proposed, it is important to bear in mind that the enacting legislation in respect of these proposals will only be sent out for public comment later in the year.
Here are Tuffias Sandberg’s top budget highlights:
- The government will collect R42.8 billion less in tax revenue than estimated in last year’s budget.
- Growth expectations have been pulled back to 1.5% in 2019 (down from 1.7%).
- The public sector wage bill will be reduced, the plans to achieve this:
- Offer early retirement to civil servants nearing retirement age.
- Members of Parliament and provincial legislatures and executives at public entities will not be receiving a salary increase this financial year.
- Reduce the number of staff in diplomatic missions.
- Despite the revenue shortfall, the budget has the lowest tax increase measures in five years. There is no increase in personal taxes, but the government will collect more money by not adjusting the tax tables to accommodate for inflation.
- About 1.1 million young people have been employed under the tax incentive scheme. From 1 March 2019 employers will be able to claim the maximum value of R1 000 a month for employees earning up to R4 500 a month, up from R4 000. The incentive tapers off to zero once the employee earns R6 500 or more.
There are no changes to the following:- Local interest exemption still R 23 800 for under 65’s and R 34 500 for over 65’s.
- Tax-Free investment annual limit R 33 000.
- Corporate tax rate – 28%.
- Dividend Tax – 20%.
- CGT inclusion rates: individuals – 40%, other entities – 80%.
- Transfer duty table.
- Estate Duty abatement is still R 3.5 million.
- Donations tax – 20%.
Download your copy of our electronic tax 2019/2020 booklet here.
Should you have any queries contact us.
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