Here are some of the summarised highlights of Finance Minister’s, Pravin Gordhan’s budget speech.
Despite negative speculation personal income tax, to the relief of many individuals, remained unchanged.
But if your salary increases are inflation-linked this will result in your income taxed at a higher rate anyway.
Although Consumer Gains Taxes has increased, so did the exclusion which was from R30 000 to R40 000 per annum.
The exemption rate for interest to be taxed has remained unchanged too and it’s not expected to change in the near future either.
You will enjoy an increase in the tax rebates for medical scheme contributions from R270 to R286 for yourself and your first dependent. In essence it’s a deduction from tax you owe providing some relief to tax paid.
Property buyers will be pleased that there was no increase in transfer duty except for properties sold that are R10 million and above.
The usual and expected ‘sin taxes’ increased and an interesting introduction to sugar taxes will be in force in 2017.
It’s designed to deter consumers from unhealthy lifestyle choices and send a very positive and responsible message across the board. While the sugar tax will have a heavy effect on consumers, it will be by their individual choice.
Old age disability will rise by R80 in April to R1 500 and then to R1 510 in October, which is certainly some welcomed relief to the recipients.
An interesting twist was when Pravin Gordhan announced the state vacancies and administrative posts will be ‘frozen” until planning and assessments are concluded.
Of course this excludes teachers, nurses, doctors and fire service workers.
But added this to the fact that he flew economy class to the event of the reading of the budget speech amongst other controversial mentions in the media demonstrates that he is conveying an extremely intrepid message across. All in all it was a welcomed speech across the board.
