Budget speech 2016
Category General
The Finance Minister, Pravin Gordhan, delivered his budget speech earlier today, highlighting government’s commitment to implementing a plan for stronger economic growth and better cooperation between government and the business sector.
The highlights of the budget speech include:
- No increases in the personal income tax rates, contrary to earlier predictions. The primary rebate and the bottom three income brackets will be adjusted by 1.8% and 3.4% respectively. The tax threshold has been adjusted to R75 000 (below the age of 65); R116 150 (age 65–74) and R129 850 (age 75 and over).
- Effective rate on capital gains tax to rise:
- for individuals – from 13.7% to 16.4%
- for companies – from 18.6% to 22.4%
- Transfer duty on property sales above R10m will be raised from 11% to 13% from 1 March 2016.
- General fuel levy will be raised by 30c per litre to R2.85 per litre for petrol and R2.70 per litre for diesel from 6 April 2016.
- The Road Accident Fund levy will remain the same on 154c per litre as it will be replaced by the Road Accident Benefit Scheme.
- Tax credits on medical scheme contributions are increased to maintain the current level of relief in real terms.
- The plastic bag levy is increased from 6c to 8c per bag.
- The introduction of a tyre levy aimed at clearing motor vehicle tyre waste (from 1 October 2016).
- Increases of between 6% and 8.5% in the duties on alcoholic beverages and tobacco products (the so-called “sin taxes”).
- The taxing of sugar-sweetened beverages will also be introduced to reduce national sugar consumption and curb the prevalence of, amongst other illnesses, obesity and diabetes (from 1 April 2017).
- Social grants:
- Old age‚ disability and care dependency grants will rise by R80 to R1 500 in April this year and by a further R10 to R1 510 in October.
- The child support grant will rise by R20 to R350 in April and the foster care grant by R30 to R890.
Author: Bisset Boehmke McBlain Attorneys
