South Africans will be spared increases in personal income tax this April, but Treasury proposes increases in the fuel levy, environmental taxes and excise duties to raise much-needed additional revenue in the next financial year.
“We have been mindful of the need to moderate the impact of tax increases on households and firms in the present economic context,” Gordhan said, while tabling the country’s budget on Wednesday.
The minister announced a 30 cents a litre increase in the fuel levy, which comes into effect on April 1, adjustments to capital gains tax and transfer duty, and limiting fiscal drag relief, a measure used to offset the impact of inflation on lower income earners.
The increases in the fuel levy, excise duties and environmental taxes are calculated to add R9.5 billion in revenue, while the adjustments to capital gains tax and transfer duties would increase revenue by R2 billion.
“The transfer duty rate on properties above R10 million will increase from 11 percent to 13 percent, and measures are proposed to strengthen the estate duty and donations tax,” Gordhan said.
While full fiscal drag relief for 2016/17 was estimated at around R13.1 billion, government proposed only partial relief amounting to R5.5 billion. That leaves R7.6 billion as additional revenue.
– African News Agency (ANA)