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2017 Budget Brief

A1bThis budget brief was compiled by Royden Whitfield, WHITFIELD FINTAX.
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  • The primary rebate has been increased from R13 500 to R13 635 per year for all individuals.
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  • The secondary rebate, which applies to individuals aged 65 years and over, has been increased from R7 407 to R 7 479 per year.
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  • The third rebate, which applies to individuals aged 75 years and over, has been increased from R2 466 to R 2 493 per year.
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  • The threshold below which individuals are not liable for personal income tax is thus increased to R75 750 of taxable income per year, R117 300 per year for those aged 65 to 74, and R131 150 for age 75 and over.
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  • The maximum marginal tax rate has increased significantly from 41% to 45% and kicks in at a taxable income of R 1 500 001 per annum for natural persons and special trusts.
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  • The flat rate for Trusts has increased significantly from 41 to 45%.
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  • The flat rate applicable to companies remains the same at 28%.
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  • The tax rates applicable to qualifying small business corporations has remained the same but with an adjustment to the tax free amount increased slightly to R 75 751.
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  • The dividends tax rate (DWT) applicable to dividends from companies has increased substantially from 15% to 20%.
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  • Monthly medical scheme contribution tax credits will be increased from R286 to R303 a month for the first two beneficiaries and from R192 to R204 a month for each additional beneficiary, with effect from March 1 2017.
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  • The annual exclusion for capital gains tax has remained the same at R40 000.
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  • The capital gains tax inclusion rates has remained the same.
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  • No changes in the estate duty and donations tax rate and the R3.5million basic deduction remains unchanged.
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  • The tables used to calculate the deduction allowed against Travelling Allowances has been changed slightly.
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  • The rate used to calculate reimbursement business travel for travel has increased from R3,29 to R3,55 and the distance limit has increased from 8 000 km to 12 000 km.
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  • Subsistence allowance rates (tax free) payable to employees who are obliged to spend at least one night from his usual place of residence in SA have been increased from R372 to R397 and from R 115 to R122.
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  • No changes in the VAT rate (remains at 14%).
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  • Zero-rating of VAT on fuel to be removed from 2018/19 financial year.
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  • The annual allowance for tax-free savings accounts will be increased from R30 000 to R33 000 per annum.
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  • No adjustments to tax tables of retirement lump-sum payments.
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  • The transfer duty rates applicable to the sale of fixed property has remained the same but the brackets have changed with the nil band increased from R750 000 to R900 000 meaning there is no transfer duty payable on the sale of property under R900 000.
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  • Fuel Levy is to rise by 9c/L.
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  • Excise duties on alcoholic beverages increase by between 6.1% and 9%.

You can download a detailed summary of the tax aspects of the 2017 budget from the SARS website www.sars.gov.za. You can even download the full budget speech from the SARS website. However, we thought we would make it easy for you and give you just the tax snippets and trust that you will find this useful.

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