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Filter: Budget Speech
Tax collection efficiency trumps wealth taxes in the short-term

22 April 2024,  Tanya Strauss

Speculation surrounding the introduction of formal wealth taxes in South Africa has subsided for the time being. The South African... Revenue Service (SARS) appears to have reconciled itself to the recommendations outlined in the "Feasibility of a Wealth Tax in South Africa" Report by the Davis Committee, which underscores deficiencies in wealth information and tax collection as requiring attention and not necessarily additional ‘wealth taxes’ in the short term. SARS's intensified focus on collecting clearly indicates its intentions to address this information and tax compliance gap.

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280
Article
Is a global corporate minimum tax the death knell for offshore structuring?

22 April 2024,  André van NiekerkFrancois Fouché

Despite uncertainties surrounding global tax reforms, no additional restrictions on exchange control have been proposed in South Africa during the... 2024 National Budget speech. However, amidst this positive news, concerns linger among taxpayers regarding the introduction of a new effective minimum tax rate of 15% on multinational corporations, sparking questions about its impact on offshore structuring and international estate planning structures, as well as the continuing effectiveness of low tax jurisdictions also known as financial centres. This article delves into the implications of these developments specifically offshore structuring and estate planning strategies.

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366
Article
2024 National Budget tax proposals? Uneventful… or are sharks lurking…?

22 April 2024,  André van NiekerkFrancois Fouché

The 2024 National Budget did not provide any major tax surprises, but key observations reveal subtle strategies by SARS to... increase revenue. While the budget seemed rather vanilla, it is vital to recognise the hidden strategies and measures that can impact taxpayers' liabilities. In this article, we look at these strategies and measures.

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Article
Webinar Recording: Panel discussion on the 2024 Budget

07 March 2024,  André van NiekerkDr Candice ReyndersDr Damian ViviersFC LiebenbergFrancois FouchéTanya Strauss

PH Attorneys hosted an insightful online panel discussion on the 2024 national budget, reviewing the budget from a different angle... to the traditional economic and tax evaluation, and assessing the budget implications for individuals, companies and trusts from a legal, tax, accounting, fiduciary and compliance perspective. If you missed this exclusive webinar, you can view the webinar recording.

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857
Article
2022 Budget speech: the most important tax changes you should know about

24 February 2022,  Johnny Davis

“Now is not the time to increase taxes and put the recovery at risk! Accordingly, we have decided to keep... money in the pockets of South Africans”.Finance Minister Enoch Godongwana’s budget speech on Wednesday brought welcome news to South Africans from a tax perspective, with the ongoing impact of the Covid-19 pandemic and the resulting financial strain that most South Africans are struggling with being the reason for the most significant tax changes implemented.The most important tax proposals and amendments tabled, are as follows:1. Personal Income TaxThe personal income tax brackets and rebates will be adjusted by 4.5%, in line with inflation. This allows for above-inflation increases in tax brackets, effectively decreasing personal income tax rates. Here is a summary of the tax rates applicable from 01 March 2022 to 28 February 2023: Taxable income (R) Rates of tax (R)  1 – 226 000 18% of taxable income  226 001 – 353 100 40 680 + 26% of taxable income above 226 000  353 101 – 488 700 73 726 + 31% of taxable income above 353 100  488 701– 641 400 115 762 + 36% of taxable income above 488 700  641 401 – 817 600 170 734 + 39% of taxable income above 641 400  817 601 – 1 731 600 239 452 + 41% of taxable income above 817 600  1 731 601 and above 614 192 + 45% of taxable income above 1 731 600  Medical tax credits will increase from R332 to R347 per month for the first two members, and from R224 to R234 per month for additional members. 2. Employment tax incentiveThe employment tax incentive will be expanded through a 50% increase in the maximum monthly value, to R1 500.3. Corporate TaxMinister Godongwana correctly stated that “restructuring the corporate income tax system is an important part of our efforts to create a conducive environment for businesses to grow, increase investment and employ more people.”As alluded to in the 2021 budget, the corporate tax rate is to reduce to 27% for tax years ending on or after 31 March 2023.The following rates remained unchanged; VAT at 15% Dividends withholdings tax at 20%  All inclusion rates for Capital Gains Tax (CGT)  Interest and royalty withholding tax rates at 15%   4. Excise duties  Excise duties on alcohol and tobacco will increase by between 4.5% and 6.5%.5. Fuel LeviesTo provide some relief to households, no increases will be made to the general fuel levy on petrol and diesel for 2022/23.6. Retirement reformMinister Godongwana announced that draft legislation that proposes partial access to retirement funds, while encouraging a preservation of a bulk of individual retirement savings, will be published by mid-year.“Government has also proposed a fundamental restructuring of the retirement system for individuals to allow for greater preservation and partial access to funds through a 'two-pot' system.“Part of this proposal includes the possibility of short-term access, which would be dependent on the approval by trustees of each fund,” he stated.Overall, the 2022 Budget Speech focused on collective participation and buy-in that will enable South Africa to steer the ship in the right direction. Though as Minister Godongwana reminds us, “a swallow does not a summer make”. The journey to recovery may still be long, but it seems as though we are off to a good start.As soon as the new financial year starts, we will keep a close eye on exactly how these changes are implemented and bwill further advise on how this may affect you. Watch this space!

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