Taxpayers hit with highest marginal rate since ’94

Cape Town – The question for Finance Minister Pravin Gordhan going forward is, can we be sure the spending plans are sufficiently robust to grow the economy and therefore stave off a further tax increase? With SA’s gross domestic product (GDP) growing slowly and unemployment remaining the same – therefore no new jobs – an increase in tax revenue can only go so far before taxpayers will eventually be paying more and more with no real return to the economy. This is the view of Marc Sevitz, a member of the National Tax Operations Committee of the SA Institute of Chartered Accountants (SAICA) in reaction to Budget 2017.

Budget2017: Little good news for South Africans

WATCH: Budget was pro-poor, but not populist – expert Taxpayers hit with highest marginal rate since ’94 Gordhan aims to soothe tensions with SARS Cape Town Finance Minister Pravin Gordhans 2017 Budget Speech was one that was drafted in difficult times amid revenue shortfalls, slow economic growth, increasing government debt and uncertainty about his tenure as political head of the National Treasury. As was widely speculated, Gordhan announced a new personal income tax bracket for South Africans earning more than R1.5m who will be taxed at 45%, while providing limited relief for fiscal drag. Gordhan did not raise the marginal tax rates for taxpayers in the 18% to 41% tax brackets, but provided very limited tax relief for this grouping.