Author: Marty Santana, PAYE Director at BDO SA
Johannesburg, 26 February 2015 Individuals are going to be seriously out of pocket during the next financial year. The budget has announced a 1% increase in all the rates in excess of income at R181 900. Although consumers have had the benefit of a decrease in petrol price in recent months, this is not expected to last for much longer and now the budget has announced a fuel levy increase of 30.50 cents a litre and an increase in the Road Accident Fund of 50 cents a litre. There was no announcement made about the abolition of the toll levies so consumers again are not getting any relief on this front.
Good news is that Treasury has proposed a one-year relief measure with regards to Unemployment Insurance Fund (UIF) contributions in the 2015 Budget by lowering the contribution threshold to R1 000. This means that the maximum contribution by each of the employer and employee is R10 per month as opposed to the current maximum monthly contribution of R 148.72, a saving R138.72 per month where the maximum contribution applies. This announcement is due to good management of the UIF funds which currently stand at a positive balance of over R91 billion.
The foreign investment allowance has also been increased from R4 million per annum to R10 million. High net worth individuals will be able to take advantage of this and move more South African funds offshore.
Individuals who are concerned about tax planning using trusts, may have been given a reprieve as there was a notable lack of any announcements in this area.