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What You Can Expect for the 2019 Tax Year

The 2019 tax year holds a few changes for taxpayers in South Africa. One important change is the VAT increase from 14% to 15%. It certainly has made it difficult for businesses, especially when deciding whether to absorb the 1% increase for the transition period or give the increase through to the consumer with higher prices.

The 1% VAT increase is expected to increase the fiscal income with an added R22,9 billion for the 2019 tax year. There have not been adjustment changes to the top four income brackets as far as individual taxpayers are concerned. However, the bottom three individual income brackets have seen below inflation adjustments.

The fuel taxes for the 2019 tax year have also been increased to 22 cents per litre and 30 cents per litre for the Road Accident Fund contribution. Carbon tax will be implemented from January in the new tax year, which will not have a large impact on individual income, but will certainly affect corporations.

Income above R1 500 000 per annum (individuals) will be taxed at 45% in the 2019 tax year. As such, no changes in this income bracket. Trusts, other than specialised trusts, will still be taxed at a rate of 45% in the new tax year. Trusts are thus highly taxed and unless an individual’s estate is considerable, a trust is simply not worth it if we consider the cost of setup and administration, in addition to the 45% tax.

Donations tax is still at 20%. Small business corporations are still taxed at 28% in the 2019 tax year, with micro businesses that are paying turnover tax being taxed at a maximum of only 3%, with the minimum rate still set at 0%. Estates are to be taxed at 25%.

When it comes to travel allowance in the 2019 tax year, it is important to note that if an employee receives a travel allowance, the employee must deduct the allowable deduction for travel related to business purposes. It can be done using the actual business expenditure or the deemed cost per kilometre according to the SARS table for such.

Let us help you understand the 2019 tax year requirements, and handle the tax calculations and submissions, in addition to VAT returns, to ensure full compliance with SARS requirements.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Contact us for advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing – May 2018.

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