The Minister of Finance is seeking public comment on a proposal for a temporary reduction in employers and employees’ contributions to the Unemployment Insurance Fund (UIF), while keeping benefits unchanged. In the 2015 Budget Speech, the Minister proposed to reduce the remuneration threshold against which the contributions are calculated from the current monthly amount of R14 872 to R1 000. Given the challenging economic environment that has led to downward revisions in economic growth, a reduction in unemployment insurance contributions will provide significant support to households and employers.
Author: Nyasha Musviba
PwC Tax Comment on the 2015 Budget Review
Personal Income Tax The Finance Minister proposes that the marginal personal income tax rates increase by 1% for all income tax brackets, with the exception of the lowest bracket which will remain at 18%. This means that a taxpayer earning approximately R100,000 per year will have an additional R44.25 extra in their pockets every month. This barely covers the ever-rising cost of fuel and consumables. However, a taxpayer who earns approximately R1 million per year can expect to have R379.22 less cash to take home every month.
Budget 2015 – Retirement planning opportunities in flux
The 2015 budget has referred to various changes which will affect retirement planning opportunities for individuals. The widely publicised changes to taxation of contributions to retirement funds was due to take effect as from 01 March 2015 but had been postponed during the past year to 01 March 2016 ( i.e. the 2017 tax year).
Budget 2015 – Post budget: individuals to be out of pocket during next financial year
Author: Marty Santana, PAYE Director at BDO SA Johannesburg, 26 February 2015 – Individuals are going to be seriously out of pocket during the next financial year. The budget has announced a 1% increase in all the rates in excess of income at R181 900. Although consumers have had the benefit of a decrease in petrol price in recent months, this is not expected to last for much longer and now the budget has announced a fuel levy increase of 30.50 cents a litre and an increase in the Road Accident Fund of 50 cents a litre. There was no announcement made about the abolition of the toll levies so consumers again are not getting any relief on this front.
Transfer Pricing and Country by Country Reporting – Critical focus for Budget
Author: Roxanna Nyiri, Head: Transfer Pricing, BDO South Africa The OECD’s adoption of country-by-country reporting (CbCR) was issued in September 2014 as part of the ongoing review of base erosion and profit shifting (“BEPS”).
Using the VAT system to decrease the Budget deficit
Author: Ferdie Schneider, National Head: Tax, BDO South Africa The Minister has various options at his disposal concerning how he could use VAT as a fiscal instrument to raise revenue and reduce the budget deficit that has occupied the brain trust in government. South Africa’s VAT rate has been constant since 1993 when it was raised from 10% to 14%, it is also relatively low compared to international standards. Emerging markets average at approximately 18%, whereas developed countries average at approximately 17%.
Budget 2015 – Using the VAT system to decrease the Budget deficit
Author: Ferdie Schneider, National Head: Tax, BDO South Africa The Minister has various options at his disposal concerning how he could use VAT as a fiscal instrument to raise revenue and reduce the budget deficit that has occupied the brain trust in government. South Africa’s VAT rate has been constant since 1993 when it was raised from 10% to 14%, it is also relatively low compared to international standards. Emerging markets average at approximately 18%, whereas developed countries average at approximately 17%.
Budget 2015 – Highlights
Highlights of Finance Minister Nhlanhla Nene’s 2015/16 main budget include: — A budget deficit of 3.9% of GDP is expected for 2014/15, narrowing to 2.5 percent in 2017/18; — Debt stock as a percentage of GDP is expected to stabilise at 43.7 percent in 2017/18; — The main budget non-interest expenditure ceiling has been reduced by R25 billion over the next two years;
Budget 2015 – Social development budget up 7.9% #Budget2015
The 2015/16 social development budget allocation of R155.3 billion will largely be spent on assisting vulnerable groups, Finance Minister Nhlanhla Nene said. The 7.9 percent increase in the budget over the previous year was to cater for a larger number of beneficiaries, mostly in the child support grant, and higher grant pay-outs, he told the National Assembly in tabling his first main budget.
Budget 2015 – Nene appoints advisory committee to resolve the woes of SARS #Budget2015
Finance Minister Nhlanhla Nene announced that he has appointed an advisory committee headed by a retired judge to help resolve the woes of the SA Revenue Service (Sars). Nene made the announcement shortly before tabling his first main budget in the National Assembly, for 2015/16, and said the committee would be headed by retired Judge Frank Kroon.