South Africans should go out and take up opportunities on the African continent, Finance Minister Pravin Gordhan has said. Addressing reporters this morning ahead of his budget speech in Parliament, Gordhan said South Africa has not fully recovered from the global economic crisis of the past five years, but “all isn’t dull either”. He said South Africans shouldn’t be complacent. “What South Africans need to do as the public and private sector is to seize potential opportunities on the African continent even more strongly than they have,” he said.
Category: Budget 2014/15
Budget 2014: Eskom, Transnet, Sanral expected to spend R382bn
Capital expenditure by major state-owned companies has been projected to reach R381.9-billion over the next three years, says the national treasury. Capital expenditure by major state-owned companies is expected to reach R381.9-billion over the next three years and investments by Eskom, Transnet and the South African National Roads Agency Limited (Sanral) will account for 90% of it, the national treasury said in its budget review.
Budget 2014: 'Disappointing' Budget leaves little room for health boost
The Rural Health Advocacy Project says the Budget was “disappointing” as it does not make provision for improvements in healthcare service delivery. Finance Minister Pravin Gordhan’s 2014 Budget speech was “disappointing”, according to Daygan Eager of the Rural Health Advocacy Project at the University of the Witwatersrand. He said that Gordhan’s commitment to lowering the budget deficit leaves little space for improvements in healthcare service delivery.
Budget 2014: Carbon tax delayed, fracking favoured in Gordhan's Budget
By Sipho Kings The 2014 Budget has delayed the carbon tax, punted shale gas, budgeted for more independent energy, and asked that mines help fix acid mine drainage. Finance Minister Pravin Gordhan has delayed the carbon tax by one more year to 2016. Last year, he said it would start by January 1 2015. This was “to allow further consultation”. The point of the tax is to punish companies that do not lower their carbon emissions, but also to provide incentive to companies that change the way they do business.
Budget 2014: Increase in bursary funds may avert more student protests
By Sarah Evans Treasury will increase funds to the National Student Financial Aid Scheme, which is likely to help more than 500 000 students per year. With some universities across the country currently besieged by student protests over exorbitant fees and a shortage of bursary funds, national treasury announced on Wednesday that it will increase funds to the National Student Financial Aid Scheme (NSFAS). Government expects this to assist more than 500 000 students per year. The South African Students Congress (Sasco) called for mass protests this year over a shortage of NSFAS funds, which it said has excluded millions of poor students from the higher education system.
Budget 2014: We have heard your pleas, says Gordhan
Finance Minister Pravin Gordhan’s final Budget speech before elections in May is a masterplan to please the masses. On the eve of an election in the historically significant 20th year of South African democracy, Finance Minister Pravin Gordhan sang a carefully crafted song. It was not the voice of a sycophantic public servant; nor was it the voice of a self-congratulatory bureaucrat. Instead, he adopted the voice of the listener: the voice of the disgruntled electorate. He spoke for those who had voted his party into power five years ago, and those who had recently publicly booed the president of the same. Read Gordhan’s full speech (PDF) A foray near the end of his speech best summed up his tone. “Puso e utlwa dillo tsa maAfrika Borwa! Ons het gehoor! Korrupsie moet gestop word! [We have heard you! Corruption must be stopped!] MaAfrika Borwa deserves better … Read More …
Taxing times ahead for Gordhan
The situation is likely to get tougher for consumers in the immediate future, economists warn, with tax increases being seen as one of the most obvious solutions open to Finance Minister Pravin Gordhan. They believe that finding more ways to cut back on government spending and raising taxes are the only immediate options open to Gordhan, who is presenting the annual budget at the end of this month. The South African consumer is already stressed, dealing with the side effects of a weakened rand, higher interest rates, inflation increases and now high petrol prices, which resulted in motorists rushing to fill tanks before the price hike to R13.96 a litre came into effect on February 5.
New tax treatment of medical expenses
Johannesburg – At present taxpayers aged under 65 years are on a hybrid system with regard to the income tax treatment of their medical expenses. While contributions to medical aids are subject to credit relief, medical expenses in excess of 7.5 % of taxable income are claimed as a deduction. On the other hand, taxpayers aged 65 years or older are on a deduction-only system. From 1 March 2014, all taxpayers, regardless of age, will be on a credit-only system. David Warneke of BDO SA explains what this means for taxpayers. Currently contributions to medical aids or medical expenses by the taxpayer’s employer are a taxable fringe benefit in the hands of the employee.
On South African tax compliance, tax morality and taxpayers’ freedom to do tax planning – Canada, Ireland and South Africa are not worlds apart
The upcoming Budget Speech comes against the backdrop of a depressing South African growth rate, stubbornly high unemployment, a depreciating Rand (with more US tapering still to come), continued strikes in the mining sector, deadly service delivery protests and declining tax revenues. On a more positive note: In November 2013 Minister Gordhan pointed to the continued growth in tax compliance by South Africans and said: “… the ability to collect tax revenue …to finance the provision of public services and socioeconomic infrastructure has been a cornerstone of our democracy these 20 years.”
The limitation of deductions for untaxed interest
Author: Kyle Mandy (PwC) The Taxation Laws Amendment Bill 39 of 2013 proposes the introduction of a new section (section 23M) to the Income Tax Act (ITA) to limit the deduction of interest incurred by a debtor in respect of a debt owed to a creditor that is in a ‘controlling relationship’ with the debtor and the interest in question is not subject to South African tax. The restriction will apply to interest incurred on or after 1 January 2015. In essence, the section limits the deduction for interest paid between connected persons where the interest is not taxed in the hands of the recipient to an amount determined with reference to 40% of taxable income before interest and capital allowances.