February 2024

Individual Tax

The budget contains tax measures that will raise the additional R15 billion that is required to balance the budget.  This will be achieved by not adjusting the individual tax brackets, rebates and medical tax credit for inflation.

The tax rates are therefore indirectly increased which will increase the burden of taxes on the average South African.

Tax thresholds

Rebates

Companies and Trusts

• Tax rate for trusts other than special trust remains at 45%
• Extension of the learnership tax incentive to 31 March 2027
• Tax rate for companies remains at 27%
• Proposed exemption on assessed loss restriction for companies winding up, liquidation or deregistration
• Global minimum corporate tax rate for multinational corporations subject to an effective tax rate of at least 15%

Unmodified Taxes

The following taxes remains unchanged.

• Donations Tax
• Capital Gains Tax
• Value added Tax
• Dividend Tax
• Transfer Duty

Maximum effective capital gain tax rate:

• Individuals and special trusts: 18%
• Companies: 21.6%
• Other trusts: 36%

Solar Panels

• Solar panels tax credit not extended

Energy tax incentive

• Proposed generation threshold and leasing restriction to take effect from 1 March 2025
• Producers of electrical and hydrogen-powered vehicle will be able to claim 150% in the first year of investment

Unmodified Levies

• General Fuel Levy on petrol and diesel for 2024/25
• No increase in the Road Accident Fund levy

Other increases

• Between 4.7% and 8.2% increase in specific excise duties on tobacco products and an increase between 6.7% and 7.2% on alcoholic beverages
• 14 cents increase on a 340ml can of beer
• 28 cents increase on a 750ml bottle of wine
• 89 cents increase on a 750ml bottle o sparkling wine
• R5.53 increase on a 750ml bottle of spirits
• R9.51 increase on the price of cigars
• 97 cents increase to a pack of cigarettes
• 57 cents increase for a pipe of tobacco
• The vaping sector is not exempt from the price hike
• Carbon fuel levy increase to 11 cents per litre for petrol and 14 cents per litre for diesel effective from 3 April 2024
• Plastic bag levy increased to 32 cents per bag from 1 April 2024

Retirement funds

Two-pot retirement reform, which enables pre-retirement access to a portion of one’s retirement assets, to be implemented on 1 September 2024.

Written by: Margaret Smith

Email: info@nexia-sabt.co.za