2018 Budget Speech Highlights and 2018/2019 PKF Tax Guide

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Finance Minister Malusi Gigaba delivered his maiden 2018 budget speech on 21 February 2018. The highlights of the tax related budget proposals announced by the Minister are as follows:

  • As from 1 April 2018, the VAT rate increases from 14% to 15%.
  • As from 1 March 2018, the Donations Tax rate increases from 20% to 25% in respect of donations in excess of R30 million.
  • As from 1 March 2018, the Estate Duty rate increases from 20% to 25% in respect of the value of dutiable estate in excess of R30 million.
  • As from 1 April 2018, tax on sugary beverages will be levied at 2.1 cents per gram exceeding 4 grams per 100ml.
  • The Income Tax and VAT legislation will be amended to clarify the tax treatment of cryptocurrency transactions.
  • Consideration is being given to increasing the official interest rate to align it closer to the prime lending rate.
  • Medical tax credit increases are below inflation in order to assist with funding the National Health Insurance Programme over the next few years.
  • The draft legislation in 2017 provided for a reclassification of distributions from foreign trusts to resident beneficiaries to be taxed as income. These proposals were postponed and will be reconsidered in the current year.
  • SARS will release a discussion paper on the potential use of electronic fiscal devices, know as electronic cash registers, to assist revenue administration by monitoring business transactions.