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2014 Budget Speech Highlights

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2014/2015 Financial Year Budget Speech Highlights

Highlights:

  • R9.3 billion given to individual taxpayers to offset fiscal drag

  • No changes to income tax, VAT or capital gain tax rates, although “sin” taxes (see attached table) go up.

  • Tax free lump sum payments on retirement increased from R315 000 to R500 000. In addition, government is addressing taking costs out of the retirement funding chain to ensure greater benefits for retirees

  • The carbon tax has been delayed to 2016

  • No concrete action taken on National Health Insurance but it is on the government’s radar

  • Licensing and regulatory systems will be streamlined.

  • Manufacturing incentives of R10.3 billion over the next three years will be introduced. Additional machinery and productivity allowances of R15.2 billion will come into effect.

  • Currently, philanthropic entities (Public Benefit Organisations) are required to distribute 75% of their donations within one year. This will be relaxed and will enhance the sustainability of such organisations.

  • Small business (Micro Enterprises and Small Business Corporations) were given minor increases. The Minister emphasized that additional relief would come to small business this year, including reducing the compliance burden and a reduction in the rate of turnover tax for micro businesses from 6% to 5%.

  • Special Economic Zones will be allocated R3.6 billion to increase exports and job creation.

Overall, this was a conservative budget, which keeps fiscal policy on a sound footing.

Below are the 2014/2015 South African tax tables

Individuals and special trusts

Taxable Income Rate of Tax
(R)0 – 174 550 18% of taxable income
174 551 – 272 700 31 419 + 25% of taxable income above 174 550
272 701 – 377 450 55 957 + 30% of taxable income above 272 700
377 451 – 528 000 87 382 + 35% of taxable income above 377 450
528 001 – 673 100 140 074 + 38% of taxable income above 528 000
673 101 and above 195 212 + 40% of taxable income above 673 100

Tax Rebates

Rebate

Primary R12 726
Secondary (Persons 65 and older) R7 110
Tertiary (Persons 75 and older) R2 367

Tax Thresholds

Age Tax Threshold
Below age 65 R70 700
Age 65 to 75 R110 200
Age 75 and over R123 350

 

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