10th June 2019
Long-term MGI Worldwide accountancy network member MGI Bass Gordon has provided a quick summary of South Africa’s recently announced budget highlights for 2019/2020 as set out by Finance Minister, Tito Mboweni.
In his budget speech, Mr. Mboweni outlined the state of South Africa’s finances and, for a change, proposed relatively few tax adjustments.
To limit the negative impact on South African economic growth, Mboweni stated that no changes will be made to income tax brackets for natural persons for the year, but the tax-free threshold will be increased at a level below inflation. By not adjusting the income tax brackets for inflation, the South African government will raise R12.8 billion in revenue.
Proposed tax changes include:
- Fuel levies will increase by 29 cents per litre, consisting of:
a) a 15 cents per litre increase in the general fuel levy;
b) 5 cents per litre increase in the Road Accident Fund levy; and
c) the introduction of a carbon tax on fuel of 9 cents per litre.
- Excise duties on alcohol and tobacco products increase by between 7.4% and 9%.
- The Sugar Tax (under the promotion of health levy) will be increased to 2.21 cents per gram from 2.10 cents per gram.
- The new Carbon Tax will come into effect on 1 June 2019. The tax will have a three year phase-in and is primarily intended to fulfil South Africa’s pledge to reduce carbon emissions by 50% by 2030.
- The list of Zero Rated VAT (Value Added Tax) items will include white bread flour, cake flour and sanitary pads.
There is no change to the Medical Aid Tax Credits as the country plans to phase in National Health Insurance.
For further details see the white paper HERE.
For a comprehensive overview of the South African Budget 2019|2020 changes and tax tables, access the MGI Bass Gordon Tax Guide 2019|2020 HERE.
MGI Bass Gordon, a member of MGI Africa since 1985, is located in Cape Town, South Africa. MGI Bass Gordon is a multi-disciplinary professional services firm which has a long history dating back to 1935. For more information, visit the firm’s online profile or their website at www.bassgordon.co.za.
MGI Africa is part of MGI Worldwide, a top 20 ranked international accounting network with some 5,200 independent auditors, accountants and tax experts in over 260 locations around the world.
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