R6.5bn relief for taxpayers

first_img17 Febuary 2010 South African taxpayers will breathe a collective sigh of relief at the government’s decision not to raise tax rates for businesses or individuals to make up for this year’s R69-billion tax shortfall, while offering “moderate” tax relief of R6.5-billion for 2010/11. Delivering his maiden Budget speech in Parliament, Cape Town on Wednesday, Finance Minister Pravin Gordhan said a quarter of this tax relief would go to taxpayers with annual incomes of less than R150 000. The value of tax relief to households this year is half that which was handed out to individual taxpayers last year, following a year described by Gordhan as one of the “most challenging” for revenue collection since 1994, with revenue from value-added tax (VAT) down 5.1% and revenue from corporate income tax down 20% compared to 2008/09.‘Green’ taxes under consideration Among the National Treasury’s recommendations for 2010/11 is a carbon emissions tax on new passenger vehicles, which will see the owners of more fuel-efficient cars paying less tax. It has been recommended that the original tax proposal, announced in last year’s Budget Speech, be converted into a flat rate emissions tax effective from 1 September 2010. The government is also looking at how to implement a comprehensive carbon tax, with the National Treasury set to release a discussion document for public comment in the first half of the year.Tax-free interest: threshold increased Gordhan said the annual tax-free interest income will be increased from R21 000 to R22 300 for those below 65 years old, and from R30 000 to R32 000 for those aged 65 years and older. The monthly monetary caps for deductible medical scheme contributions have also been increased – from R625 to R670 for each of the first two beneficiaries, and from R380 to R410 for each additional beneficiary. The proposed conversion of these deductions into non-refundable tax credits will be postponed to 1 March 2012. Taxes on fuel, gambling The Treasury has also proposed a 25.5 cents/litre increase in the fuel tax, of which 7.5c/l will go towards funding a new multi-product petroleum pipeline between Durban and Gauteng, and 8c/l will go to the Road Accident Fund levy. Gordhan also proposed a review of the current treatment of winnings in the hands of gamblers as exempt from personal income tax. Measures will also be considered to limit opportunities for money laundering, unlicensed online gambling and other abuses. Source: BuaNewslast_img

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