By way of background, provisional tax is not a separate tax payable by certain persons, instead it is merely a method used to collect normal tax that will ultimately be payable for the year of assessment concerned, during the year. Otherwise stated, provisional tax is an advance payment of a taxpayer’s normal tax liability. A provisional taxpayer is generally required to make two provisional tax payments, six months into the year of assessment and at the end of the year of assessment, but has the option to make a third top-up payment after the end of the year of assessment. Provisional tax payments are calculated on estimated taxable income (which includes taxable capital gains) for the particular year of assessment.
Category: Budget 2016/17
2016 South African budget speech summary | tax proposals
overview The Honourable Minister of Finance read the 2016 South African budget speech on 24 February 2016. In this summary, we address only the revenue (i.e. tax) side of the budget proposals. As this budget speech has received an unusual amount of interest, we have set out the tax proposals in more detail than usual, although this summary is not intended to be comprehensive.
Budget 2016/17 – Budget in a nutshell
Cape Town – Finance Minister Pravin Gordhan’s first comeback National Budget tabled on Wednesday afternoon in Parliament was relatively calm and workmanlike one after all the expectations of tax hikes and spending cuts amid tough economic times. He stressed the need to reaffirm government’s commitment to close the gap between spending and revenue, implementing a plan for stronger economic growth and cooperation between government and the business sector. That should keep the rating agencies that want to downgrade SA’s debt position to junk status temporarily at bay.
Budget 2016/17 – No big tax surprises
Cape Town – Finance Minister Pravin Gordhan delivered a surprise during Wednesday afternoon’s National Budget presentation in Parliament by not hiking the personal income tax rate. Tax rates for companies and VAT were not increased either. However, as part of fiscal measures to narrow the budget deficit and stabilise debt growth government proposes to raise an additional R18.1bn in revenue in R2016/17. This will mainly be achieved by upward adjustments to capital gains tax (the effective rate raised from 13.7% to 16.4% for individuals), transfer duty (11% to 13% on property sales above R10m) and increases in excise duties, the general fuel levy (30 cents per litre) and environmental taxes. Although limited fiscal drag relief of R5.5bn in personal income tax will be given, the government will still raise an additional R7.6bn from individuals. This will be done by partially increasing marginal personal income tax brackets and rebates for inflation.
Budget 2016/17 – South Africa Tax Guide 2016/17 & 2016 Budget Speech
Fellow South Africans I have the honour to present the 2016 Budget of President Zuma’s second administration. We do so in a spirit of frankness, both about our challenges and the opportunity to turn our economy’s direction towards hope, confidence and a better future for all. Low growth, high unemployment, extreme inequality and hurtful fractures in our society – these are unacceptable to all of us. I have a simple message. We are strong enough, resilient enough and creative enough to manage and overcome our economic challenges……….. Full Speech (download below) 2016 Budget Speech 2016 Budget Tax Rates guide Errata to Budget Documents 2016
Tax revolt may worsen if Gordhan targets Personal Income Tax to fill gaps
Author: Jaco Leuvennink (News24). Cape Town – When the government is looking for extra money, all signs point to personal income tax (PIT) because increasing VAT and Company Tax have political and investment implications that’s currently difficult to counter, says a tax expert that spent 14 years of his career developing tax legislation, especially closing loopholes, at the National Treasury. Professor Keith Engel, an American with South African citizenship and currently chief executive of the South African Institute of Tax Practitioners (SAIT), said in an interview on a radio station (FM Classic) that higher income earners will be targeted. “Because the super rich is usually more tolerant… (and) able to withstand tax hikes, the middle income earners may suffer the most. In an election year and with the rating agencies on our back, alternatives look highly unlikely.”
Taxpayers will feel brunt of Gordhan’s whip
Author: Liesl Peyper (News24). Cape Town – This afternoon Finance Minister Pravin Gordhan will arguably give the most significant speech of his political career when he delivers the 2016/17 budget in Parliament. Economically speaking, the odds are against South Africa with record low growth rates, the worst drought in history, and an unsustainable debt to GDP ratio, to name but a few.
Gordhan’s Rubicon moment awaits
Author: Daniel Silke. Cape Town – To say that this is South Africa’s most important budget since 1994 is an understatement. The reality of a declining economy deeply entrenched in a seemingly endemic inability to break out of downfall mode has left both domestic and foreign investors despondent, demoralised and downright depressed. Frankly, to expect the proverbial rabbit to be pulled out of the hat to prevent the dreaded ratings agency downgrade seems unlikely. It may just be too late. And for once, economists and their related species, political analysts, should take some credit for the many warnings issued over as many years. If you fail to address policy paralysis – and also fail to encourage a diversification of your economy to the demands of the future – you will simply be left behind.
Worry for SA’s neighbours as Gordhan readies budget
Author: Memory Mataranyika (News24). Harare – Analysts have projected a dim outlook for South Africa and its neighbours Botswana, Zambia and Zimbabwe as Finance Minister Pravin Gordhan readies for a belt-tightening Budget Speech for Africa’s second-largest economy. President Jacob Zuma last week emphasised the need to contain costs for the South African government and Gordhan will be hard pressed to deliver as he seeks to restore investor confidence and fix a struggling economy. Analysts at FocusEconomics said on Tuesday that “latest indicators point to another dismal expansion in the final quarter of 2015 and the outset of the new year. Manufacturing barely grew in December and the business confidence index recorded the second-lowest reading” in nearly a decade in January.
Budget 2016 – Will Pravin Gordhan pull it off?
Author: Solly Moeng (News24). Cape Town – South Africans at home and in the diaspora, current and potential investors, the country’s trading partners and rating agencies all have their eyes glued on one man during this week: Finance Minister Pravin Gordhan. In fact, they have one eye firmly on him and another darting uncomfortably between him and his boss, the increasingly unpredictable President Jacob Zuma, watching out for unexpected surprise moves from him.