The 2014 Budget Speech is done and dusted. And with it, Minister Gordhan's delivered some good news considering the state of the economy and, more importantly, some good news regarding tax.
The following tax proposals came out today's Budget Speech:
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#1: According to Gordhan's Money Web, personal income tax relief will amount to R9.25 billion this year. About 40% of the relief will go to taxpayers who earn below R250 000 per year.
#2: He also proposed an increase in the tax-free lump-sum amount paid out of retirement funds from R315 000 to R500 000. This is meant to benefit lower income members who don't benefit from deductible contributions.
#3: There will be increases in excise duties on sin tax for alcoholic beverages and tobacco products. This means the price of a 340ml can of beer will increase by 9c and a packet of 20 cigarettes will increase by 68c. Whisky will go up by R4.80 a bottle. These increases take effect immediately.
#4: The general fuel levy increase will be limited to an inflation-related 12c per litre on 2 April 2014, and the road accident fund levy will increase by 8c per litre. That means you can expect to pay more at the pump when you fill up your car.
But if you're a small business owner you'll be glad to know that you'll get more support when it comes to your taxes
Money Web explains that Gordhan also proposed:
#5: Increased support and tax relief for entrepreneurs and small businesses.
#6: Strengthened incentives for industry, including funding for special economic zones.
#7: Training and financial support for nearly 500 000 subsistence and small-holder farmers.
#8: On the retirement front, the minister said steps will be taken to make sure taxpayers have a secure income in retirement. This means unnecessary costs in the system will be cut.
#9: In the next fiscal year SARS will implement single registration of taxpayers and traders for the main taxes.
#10: The minister said 'SARS is already working closely with other government agencies to share non-confidential electronic data. Without compromising privacy and confidentiality, this will contribute to reducing identity fraud, lower administration costs and enhance compliance.'
Be warned! The minister stressed that tax evasion and fraud won't be tolerated.
In his speech, Gordhan said 'new global tax policies are being devised to counter harmful tax practices and treaties are being designed to allow for the automatic exchange of information.'
Look out for analysis regarding the budget speech tomorrow when we'll show you how some of the proposed changes will affect your business.
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