Budget 2014 – Budget's impact on personal finance

Johannesburg – The 2014 National Bugdet will have an impact on consumers’ tax and retirement and Michelle Dubois, legal marketing specialist at Liberty explains its impacts on personal financial planning for the short and long term future. Will I save tax this year? There was the usual inflationary adjustment to the tax tables to reduce the effect of the so called “bracket creep”. It effectively means that an inflationary linked salary increase will not push your income into the next tax bracket, which would increase your tax payable. The tax relief will be seen in your end of March payslip, and whilst it may not be a lot of money, this is money that you never had before so make sure that it is put to good use.

Budget 2014 – 'Deemed loan' secondary transfer pricing adjustment to be scrapped

By David Warneke, BDO South Africa One of the tax proposals contained in the 2014 Budget review is the scrapping of the ‘deemed loan’ secondary transfer pricing adjustment contained in section 31(3) of the Income Tax Act, in favour of such an adjustment being treated as a dividend subject to the dividends tax or a ‘capital contribution depending on the facts and circumstances’. The scrapping of the deemed loan treatment is generally to be welcomed although scant detail regarding the proposal was provided in the Budget Review.

Budget 2014 – Income Tax and VAT highlights of the 2014 Budget

The 2014 Budget produced few surprises. There were no changes to the corporate or personal income tax rates, capital gains tax inclusion rates or the VAT rate. The robustness of revenue collections, almost in line with the 2013 forecast, probably played a part in enabling the Minister to keep rates steady. The most significant changes are: The introduction of tax-preferred savings accounts. The initial contribution limits are very low, at R30 000 per annum, with a lifetime contribution limit of R500 000. This was announced at last year’s budget.

Budget 2014 – Lump sum tax break for people who retire

Author: Stephen Craston ONE of the biggest bits of good news in this year’s budget is for those who are facing retirement. Most pensioners take a lump sum of one-third of their accumulated capital when they retire. The tax-free threshold for these lump sums has been increased from R315000 to R500000. Special national treasury adviser David McCarthy says it is inequitable that the lower-paid, who did not benefit from a tax deduction as they weren’t paying income tax, should have to pay tax on their lump sums. The wealthier will benefit as well, as the top rate of 36% now kicks in at R1,05m, up from R945000 in the past financial year. Government has also reduced tax on lump sums taken before retirement, with tax kicking in at R25000, up from R22500.

Budget 2014 – Tax relief favours small business

Author: Chantelle Benjamin High and low earners also found some cheer in a budget focused on stimulating growth.  “We are dying here. It’s very hard for a small ­business to get funding or deal with the red tape,” one desperate small business owner said at a small, medium and micro enterprise (SMME) conference in Sandton a month ago — a plea that was heard by the government in the latest budget. Based on early recommendations by the Judge Dennis Davis committee looking into the present tax regime, efforts have been made to reduce the tax burden on micro enterprises and to reduce the complexity of compliance.

Budget 2014 – Tax highlights of the 2014 budget proposals

Author: ENS The minister of finance read the budget speech on the 26th of February. It covers both immediate changes to the tax regime that will receive attention over the coming 1 or 2 years. In general terms, the current and future proposals are very modest in their scope and this could be regarded as the most low-key set of tax proposals to have been put forward for many years, at least from a technical perspective. It is noteworthy that the maximum marginal tax rates applicable to individuals, trusts, companies and dividends remain unchanged. Business Third party backed shares – Several changes are proposed in relation to the tax treatment of third party backed shares. In general terms these relax the hurdles which the taxpayer must overcome to avoid falling foul of the anti-avoidance rules (which re-characterise dividends as interest). Briefly, the changes affect the re-financing of such shares; or … Continue reading

Budget 2014: Tax Budget Summary

Finance Minister Pravin Gordhan delivered his 2014 Budget Speech on 26 February 2014. While we did not anticipate major Tax changes in the current year, the complexity and challenges of the existing Tax environment means that it is time for Tax to be a board room level topic again.

Budget 2014: Taxed for your sins

Cape Town – Consumers still trying to enjoy a few small pleasures in life would have to dig a bit deeper into their pockets once again. Excise duties on alcoholic beverages (especially beer, sparkling wine and spirits) will increase by between 6.2% and 12%. Finance Minister Pravin Gordhan, did, however, think it in order not to increase the excise duty on traditional African beer or beer powder. Consumers who like to take a smoke break, will have to cough up 68 cents per packet of 20 cigarettes more from now on, while those enjoying the luxury of a cigar will pay R5.11 more per 23g.

Budget 2014: Relief for taxpayers

Cape Town – Income tax relief of R9.3bn and massive future spending on social grants are among the main features of this year’s pre-election budget. Other highlights include a budget deficit that is expected to narrow to 2.8% of GDP by 2016/17, supporting a stabilisation of debt at 44.3% of GDP. Tabling his 2014 Budget in the National Assembly on Wednesday, Finance Minister Pravin Gordhan told MPs he expected a budget deficit of four percent of GDP for this year and next (2014/15). Tax revenue this year (2013/14) was expected to be R1bn higher than projected in the 2013 budget. Gordhan said real growth in non-interest spending should average 1.9% over the next three years. A spending ceiling committed government to a cap of R1.03trn in 2014/15, R1.11trn in 2015/16, and R1.18trn in 2016/17.

Budget 2014: Budget in a nutshell

Cape Town – Finance Minister Pravin Gordhan has tabled his fifth and probably last National Budget in Parliament, strongly emphasising acceleration of economic growth to the National Development Plan’s goal of economic growth of between 5% and 6% as he kept spending under control and still surprisingly had room for some personal tax relief (especially for lower income earners). It is  a conservative budget with no big surprise. It will probably please most people with the coming elections in May in mind. The highlights are: