The world is changing fast and to keep up you need local knowledge with global context.
By Alec Hogg
- Emigration consultants and relocation companies. The increase from 41% to 45% in the top marginal income tax rate is sure to stimulate further emigration of the most productive sector of society.
- SA Post Office. New CEO Mark Barnes has clearly impressed the right people – his new charge will soon receive another cash injection from taxpayers (‘capital restructuring’) and it is being encouraged to expand the role of the newly licenced PostBank.
- New entrants into financial services – three new banking licences have been granted (including PostBank) and two new Stock Exchange licences.
- Those at the bottom of the pyramid. In Gordhan’s words, “the Budget is highly redistributive to poor and working families.” Social services now absorb 57% of total Government spending, a proportion which continues to rise. In the two instances where there has been tax relief, both are at the bottom end.
- In the context of Gordhan’s Robin Hood approach – well partly, because he didn’t have much to give to the poor – companies can count themselves as winners with the corporate rate left unchanged at 28%.
- The wealthiest 0.18% of South African society. The country’s 100 000 top earners are expected to contribute up to 40% of the R28bn additional taxes that the Finance Minister needs to raise in the 2017/18 fiscal year.
- Shareholders in South African companies. The increase from 15% to 20% in the dividend withholding tax will add a further disincentive to owning shares listed on the JSE.
- Motorists. After the shock of almost R1 extra in 2015, Treasury has decided to repeat last year’s 30c a litre increase in the general fuel levy, but after last year’s break, re-introduce another 9c a litre levy for the Road Accident Fund. Since 2014, the general tax on petrol has risen from 27% to 36% of the pump price; and for diesel from 28% to 45%.
- Offshore tax cheats. The amnesty programme has brought R3.8bn in undisclosed foreign assets into the tax net. Those who own the assets might sleep easier, but it has come at quite a price. SARS picked up a chunky R600m in extra revenue from the disclosures.
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Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.