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Breaking news: If Nene tightens SA taxpayers belts, your company will suffer too

by , 23 October 2014
The big news today is government's announcement of a possible tax increase.

Yesterday, Minister of Finance, Nhlanhla Nene's mine budget highlighted the need to increase state revenue by increasing tax.

And while he didn't indicate which taxes he intends on increasing, speculation suggests it will fall on individual taxpayers. After all, individual taxes make up the largest portion of state revenue.

But this will affect your company taxes too...

 

Here's how Nene's tax increase threat could affect your company

 
Obviously, there's the possibility Nene might target companies and closed corporations as part of his plan to increase state coffers. In this case, the effect on your company will be direct as you watch more of your revenue go to SARS.
 
This means you might have to cut back on more unnecessary spending just to be able to pay your taxes.
 
But even if Nene only increases individual taxes, it will still affect your company. Here's how…
 
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Here's how an increase in individual taxes will impact your business

 
If individual taxpayers have to pay more tax, it's likely they won't have as much money to spend on other areas. 
 
This means they may not be able to put money towards buying your goods or services. This, in turn, could lead to lower revenue coming into your business and you'll still have to cut back on unnecessary costs.
 
In addition, your employees may demand higher salaries to keep up with the ever-rising cost of living.
 
As you can see, regardless of which taxpayers end up carrying the tax increase burden, it will still affect you. Take steps to prepare your company's finances for the knock on effect today.
 


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