On 21 February 2018, Finance Minister Malusi Gigaba delivered the maiden budget speech.
Following President Ramaphosa’s State of the Nation Address theme of hope and renewal, Gigaba placed key emphasis on the risks that have been a centre of concern for the South African economy.
These are the tax proposals as noted in the 2018 budget speech:
VAT has increased from 14% to 15% and will take effect from 1 April 2018. This increase will affect 80% of higher income earners. Zero-rating food, such as brown bread, will remain VAT-free.
Personal Income Tax
The personal income tax of those earning between R0 – R555 600 per annum will remain unchanged, while those who earn more than R555 601 per annum will be affected by a 3.1% increase. Primary, secondary and tertiary rebates are partially increased for inflation.
Estate Duty and Donations Tax
Estate Duty rates have increased by 5% on dutiable estates in excess of R30 million. The same percentage increase is applicable on donations of more than R30 million.