Budget Speech 2020

The 2020 South African Budget Speech was presented by the Finance Minister Tito Mboweni on Wednesday 26 February 2020.

 

Download the summary here

GENERAL

  • Section12J tax incentive will not be renewed beyond March 2020
  • Transfer Duty will only be payable on properties with a value of more than R1 000 000
  • Income tax brackets have been adjusted upward

CORPORATE TAXES

  • Corporate tax remains unchanged at 28%
  • Companies’ assessed losses allowed to be carried forward will be restricted to 80% of taxable income from 1 January 2021
  • Dividends tax unchanged at 20%
  • Small business corporations remains in place
  • Capital gains taxes remains at effective rate of 22.4%
  • Net interest expenses will be restricted to 30% of earnings after January 2021

Effective from 1 April 2020

FUEL, SIN AND OTHER TAXES

  • Fuel levies
    – Fuel levies increases by 15 cents per litre from 1 April 2020
  • Alcohol and tobacco excise duties
    – Increases of between 4,4% and 7,5%
  • Electronic cigarettes will be taxed from 2021
  • Plastic bag levy is increased to 25 cents

TRUSTS AND ESTATES

  • The tax rate for trusts unchanged at 45%
  • Effective capital gains tax unchanged at 36%.
  • Estate duty on Estates < R 30 million remains unchanged at 20% and no adjustment to the R3,5 million rebate.
  • Estate duty on Estates > R 30 million remains unchanged 25% of the value > R 30 million
  • Donations < R 30 million to be taxed at 20%
  • Donations > R 30 million to be taxed at 25%
  • Exemption on donations of R 100 000 per annum remains

INDIVIDUALS

  • Top tier tax bracket at 45% is now at R1 577 300
  • Unchanged inclusion percentage for capital gains taxes of 40%
  • Tax-free thresholds increase from R79 000 to R83 100 for person below the age of 65
  • Individual rebates have increased from 2020 to 2021
  • Foreign income to be exempt up to R1 250 000 from 01 March 2020
  • Limit of annual contributions to tax free savings have been increased to R36 000

 

Individuals – Tax Tables 2021
Taxable Income Rate of Tax (R)
0 – 205 900 18% of taxable income
205 901 – 321 600 37 062+ 26% of taxable income above 205 900
321 601 – 445 100 67 144+ 31% of taxable income above 321 600
445 101 – 584 200 105 429 + 36% of taxable income above 445 100
584 201 – 744 800 155 505 + 39% of taxable income above 584 200
744 800 – 1 577 300 218 139 + 41% of taxable income above 744 800
1 577 301 AND ABOVE 559 464 + 45% of taxable income above R 1 577 300

 

Individuals – Tax Tables 2020
Taxable Income Rate of Tax (R)
0 – 195 850 18% of taxable income
195 851 – 305 850 35 253 + 26% of taxable income above 195 850
305 851 – 423 300 63 853 + 31% of taxable income above 305 850
423 301 – 555 600 100 263 + 36% of taxable income above 423 300
555 601 – 708 310 147 891 + 39% of taxable income above 555 600
708 311 – 1 500 000 207 448 + 41% of taxable income above 708 310
1 500 001 and above 532 041 + 45% of taxable income above R 1 500 000

INDIVIDUAL REBATES

Rebates 2021 2020
Primary R14 958 R14 220
Secondary (Persons 65 years and older) R8 199 R7 794
Tertiary (Persons 75 years and older) R2 736 R2 601

TAX THRESHOLDS

Rebates 2021 2020
Primary R83 100 R79 000
Secondary (Persons 65 years and older) R128 650 R122 300
Tertiary (Persons 75 years and older) R143 850 R136 750

OTHER REBATES

Rebates 2020 2019
Interest rebates R23 800 R23 800
Medical aid rebate (primary + 1st dependent) R319 R310
Medical aid per additional dependent R215 R205

CAPITAL GAINS TAX RATE FOR INDIVIDUALS

2019 2018
Inclusion rate 40% 40%
Maximum effective rate 18% 18%

FOR TAX PLANNING AND ADVISORY SERVICES

CONTACT US:
Henk van Zuydam
Francois Joubert
info@zuydam.co.za

Annemieke Gregory
tax@zuydam.co.za

+27 21 913 9745