Gordhan announces changes in taxes

first_imgHe also announced that the Square Kilometre Array (SKA) project – an international collaboration to build the world’s largest radio telescope – would qualify for VAT relief. “In respect of beer and spirits, an increased benchmark tax burden is proposed to be phased in over the next two years,” Gordhan said. Capital Gains Tax (CGT) for individuals and special trusts will be increased from 25% to 33.3%, and from 50% to 66.6% for companies and other trusts – still below international norms. To mitigate the impact on middle-income earners, the various exclusion thresholds will be increased. The annual exclusion threshold will be raised from R20 000 to R30 000, the exclusion amount on death from R200 000 to R300 000, and the primary residence exclusion from R1.5-million to R2-million. The secondary tax on companies comes to an end on 31 March, and a withholding tax on dividends, introduced at 15%, will be implemented from April 1. Pension funds will benefit as they will receive dividends tax-free, Gordhan said. Source: BuaNews The excise on spirits will increase by 20% to R36 for a 750 ml bottle this year. The tax on beer will go up by 10%, taking the price of a 340ml can up by R1.01. Consumers can expect to pay 8% more for a bottle of wine. The exclusion amount for the disposal of a small business when a person is over the age of 55 will be raised from R900 000 to R1.8-million, and the maximum market value of assets allowed for a small business disposal for business owners over 55 from R5-million to R10-million. As part of several measures outlined in the Budget Review to improve the corporate tax environment, Gordhan has mooted tax relief for housing developers who provide housing below R300 000 a unit. South Africa has a financial transaction tax on securities transfers, at a rate of 0.25%. Gordhan has proposed abolishing the current exemption for brokers and taxing transactions for the broker’s benefit at a lower rate. “The inclusion of financial derivatives in the base of the securities transfer tax is also under consideration,” he said.center_img 22 February 2012 Among the tax proposals that would affect businesses, Gordhan said tax relief for companies that set up in special economic zones was being considered – including a reduction in the corporate income tax rate and support for employment and training expenses. End of Secondary Tax on Companies This was announced by the Finance Minister Pravin Gordhan in his Budget speech in Parliament in Cape Town on Wednesday. Meanwhile, a revised policy paper on carbon tax would be published this year for a second round of public comment and consultation. ‘Sin’ taxes increase Increases in duties on tobacco and alcohol products will be between 5% and 8% this year. Also, with effect from October this year, an excise duty at a rate of 7% will apply to small aeroplanes and helicopters with a mass below 5 000kg. A duty of 10% will apply to motorboats longer than 10 metres. In a media briefing held shortly before he delivered his Budget speech, Gordhan said South Africa was way below international norms on Capital Gains Tax, but was quick to point out that another increase was not on the cards, at least in this administration.last_img

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