Personal tax relief of R7 billion announced in 2013 Budget

Posted 27 February 2013 Written by Ciaran Ryan
Category Financial and Accounting

Finance minister Pravin Gordhan has announce personal tax relief of R7 billion over the 2013 tax year. Adjustments to the medical tax credit and other relief will add R350 million in relief to South African tax-payers.

Other tax proposals for 2013 announced by Gordhan are:

  •  Reforms to the tax treatment of contributions to retirement savings.  
  • An employment incentive through the tax system for first-time job seekers. 
  • Further tax relief for small businesses, including an increase in the monetary tax thresholds applicable for small business corporations. 
  • An overall increase of 23 cents per litre in fuel levies in April, which includes 8 cents per litre in the road accident fund levy.
  • Increases in excise duties on alcohol and tobacco products of between 5.7 and 10 per cent, and

Introduction of the carbon tax in 2015, together with the phasing-out of the electricity levy.

“A tax review will be initiated this year to assess our tax policy framework and its role in supporting the objectives of inclusive growth, employment, development and fiscal sustainability, amongst other things,” Gordhan told Parliament during his 2013 Budget speech this afternoon.

The Budget Review outlines various measures proposed to protect the tax base and limit the scope for tax leakage and avoidance. The taxation of trusts will come under review to control abuse; modifications are proposed to the tax treatment of employment share schemes and disability or income-protection policies; outstanding difficulties in the distinction between debt and equity will be addressed; and it is proposed that foreign businesses which sell e-books, music and other digital goods and services should be required to register as VAT vendors, in line with regulations which  have been adopted by the European Union and other jurisdictions.

 

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