2013/2014 Budget In A Nutshell

01 MAR 2013

Dear Silke clients,

Please see below the 2013/2014 Budget in a nutshell:

• Personal income tax relief of R7 billion.
• An employment tax incentive targeted to support young workers and those employed in special economic zones.
• Individuals whose taxable income is from one employer and is below R250 000 a year are not required to submit income tax returns.
• Levies on fuel increase by 23c per litre from 3 April 2013.
• From March 2014 an employer’s contribution to retirement funds on behalf of an employee will be treated as a taxable fringe benefit in the hands of the employee. Individuals will from that date be allowed to deduct up to 27.5 per cent of the higher of taxable income or employment income for contributions to pension, provident and retirement annuity funds with a maximum annual deduction of R350 000. Contributions above the cap are carried forward to future tax years.
• Streamlining registration with SARS and reducing compliance requirements for the submission of tax returns by businesses.
• Requiring foreign businesses supplying e-books, music and other electronic services in South Africa to register as VAT vendors.
• Several measures are proposed to limit the deduction of interest on specific types of debt to protect the tax base.
• An automated tax clearance system will be implemented this year.
• Policy paper on carbon emissions tax to be published in 2013 with the view of introducing a carbon tax from 2015.

In his State of the Nation Address, President Jacob Zuma stated:

"The National Development Plan contains proposals for tackling the problems of poverty, inequality and unemployment. It is a roadmap to a South Africa where all will have water, electricity, sanitation, jobs, housing, public transport, adequate nutrition, education, social protection, quality healthcare, recreation and a clean environment".

We believe that the budget reflects the above mission and does not introduce any drastic change which provides taxpayers with a more certain and secure environment in which to plan financial affairs.

Do visit http://www.pmg.org.za/briefing/20130227-2013-budget-speech-na should you want any further information.