March 26th, 2013
- Personal income tax relief of R7 billion.
- An employment tax incentive targeted to support young workers and those employed in special economic zones.
- Individuals whose taxable income is from one employer and is below R250 000 a year are not required to submit income tax returns.
- Levies on fuel increase by 23c per litre from 3 April 2013.
- From March 2014 an employer’s contribution to retirement funds on behalf of an employee will be treated as a taxable fringe benefit in the hands of the employee. Individuals will from that date be allowed to deduct up to 27.5 per cent of the higher of taxable income or employment income for contributions to pension, provident and retirement annuity funds with a maximum annual deduction of R350 000. Contributions above the cap are carried forward to future tax years.
- Streamlining registration with SARS and reducing compliance requirements for the submission of tax returns by businesses.
- Requiring foreign businesses supplying e-books, music and other electronic services in South Africa to register as VAT vendors.
- Several measures are proposed to limit the deduction of interest on specific types of debt to protect the tax base.
- An automated tax clearance system will be implemented this year.
- Policy paper on carbon emissions tax to be published in 2013 with the view of introducing a carbon tax from 2015.
New Tax Rates and Legislation
The Rates of Tax in respect of the 2013/2014 Tax Year are set out in the new tax tables, shown below.
|Taxable Income (R):
||Rates of Tax:
|0 – 165,600
||18% of taxable income
|165,601 – 258,750
||R29,808 + 25% of taxable income above R165,600
|258,751 – 358,110
||R53,096 + 30% of taxable income above R258,750
|358,111 – 500,940
||R82,904 + 35% of taxable income above R358,110
|500,941 – 638,600
||R132,894 + 38% of taxable income above R500,940
|638,601 and above
||R185,205 + 40% of taxable income above R638,600
|Below age 65:
||Age 65 and below 75:
||Age 75 and over:
|Monthly Medical Aid Tax Credits:
|Each Additional Dependent
Medical Tax Credits: Effective from 1 March 2012 the capping system was replaced with a medical aid tax credit, bringing in equality for all taxpayers under the age of 65 and improved benefits for lower earners, a move in line with international best practice. The medical aid capping system is also used in the 2013/14 tax year, commencing 01 March 2013. The medical aid tax credit is R242 a month for the first two beneficiaries (including the principal member) and R162 for each additional dependent thereafter.