Category: Budget 2021/22

In the current pandemic effected economic climate, the announcement in the 2021 Budget (Budget) of the reduction in corporate income tax (CIT) from the current rate of 28% provides some relief to companies feeling the pinch of the economic downturn. CIT will be lowered to 27% for companies with years of assessment commencing on or after 1 April 2022 with a view to further CIT rate decreases over the medium term. Whilst still high compared to the global average CIT rate of 23,6%, the reduction seeks to drive growth and encourage investment in the country. In order to implement the reduction in CIT, government intends on reducing the number of tax incentives, expenditure deductions and assessed loss offsets currently available to companies in order to broaden the CIT base. The proposals by the Minister of Finance (Minister) relating to the limitation of assessed losses and excessive interest deductions have been Read More …

Authors: Wesley Grimm, Joon Chong, Cor Kraamwinkel from Webber Wentzel. South African Finance Minister Tito Mboweni delivered the 2021/22 Budget on Wednesday that treads a pragmatic path between over-spending and too much austerity, as the economy grapples with the impact of Covid-19 and lockdowns. The minister clearly listened to widespread calls to avoid raising taxes but also to allocate more funds to rolling out vaccines. Overall, it was an optimistic budget, but with some stings in the tail.