Taxpayers in South Africa have been warned to brace themselves for tax rises this year.
According to the Mail & Guardian, Ettiene Retief, chairman of the national tax and South African Revenue Service (SARS) committee at the South African Institute of Professional Accountants (SAIPA), said the government’s aim in doing so was to address the ZAR51 billion (US$4.4 billion) gap in revenues resulting from a tax collection shortfall.
This deficit is set to increase to ZAR69 billion (US$5.95 billion) or even higher in the 2018/19 tax year, Retief added. Additional funds will also be required to finance free higher education for students from disadvantaged families, as announced by former President Jacob Zuma at the 54th African National Congress elective conference last year.
Retief said that taxpayers should expect to see adjustments to their current taxable income brackets, which would boost collection levels without the need to adjust the actual rates. In last year’s budget, taxpayers saw a 1% increase in personal income tax in all taxable income brackets and a new personal income tax bracket of 45% for taxable incomes above ZAR1.5 million (US$129,360) per year.
There may not be any further rise in the top marginal rate of tax in this year's budget as it could lead to increased efforts to evade tax, Retief pointed out. He also believed it was not the right time to introduce a wealth tax, as capital gains tax, estate duty, a donations tax and transfer duty were already payable when individuals acquired a property.
Recently, the government has been warning taxpayers about an increase in value added tax (VAT). Retief estimates there will be a 1% increase, which could raise ZAR20 billion (US$1.72 billion).
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
Taxpayers in South Africa have been warned to brace themselves for tax rises this year.
According to the Mail & Guardian, Ettiene Retief, chairman of the national tax and South African Revenue Service (SARS) committee at the South African Institute of Professional Accountants (SAIPA), said the government’s aim in doing so was to address the ZAR51 billion (US$4.4 billion) gap in revenues resulting from a tax collection shortfall.
This deficit is set to increase to ZAR69 billion (US$5.95 billion) or even higher in the 2018/19 tax year, Retief added. Additional funds will also be required to finance free higher education for students from disadvantaged families, as announced by former President Jacob Zuma at the 54th African National Congress elective conference last year.
Retief said that taxpayers should expect to see adjustments to their current taxable income brackets, which would boost collection levels without the need to adjust the actual rates. In last year’s budget, taxpayers saw a 1% increase in personal income tax in all taxable income brackets and a new personal income tax bracket of 45% for taxable incomes above ZAR1.5 million (US$129,360) per year.
There may not be any further rise in the top marginal rate of tax in this year's budget as it could lead to increased efforts to evade tax, Retief pointed out. He also believed it was not the right time to introduce a wealth tax, as capital gains tax, estate duty, a donations tax and transfer duty were already payable when individuals acquired a property.
Recently, the government has been warning taxpayers about an increase in value added tax (VAT). Retief estimates there will be a 1% increase, which could raise ZAR20 billion (US$1.72 billion).
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
