Yesterday afternoon SA Minister of Finance, Enoch Godongwana, presented this year’s Budget Speech to Parliament.
The focus for this budget was on balancing economic growth while providing support for the most vulnerable in our communities. As such, there were no major increases to taxes.
To support this, the government will be drawing from the Gold and Foreign Exchange Contingency Reserve Account in the amount of R150 billion. This will only be done once they have ensured there are sufficient buffers in place to absorb any exchange rate swings and to ensure the Reserve Bank’s solvency is not compromised.
Domestic outlook for the country remains somewhat stifled, in part from lower commodity prices and structural constraints, with growth over the next 2 years projected to average out at 1.6%.
This outlook is driven by expected improvements resulting in the easing of power cuts as new renewable energy projects begin, as well as lower inflation supporting further household consumption and credit extension.
Negative factors contributing to lower growth is the continued electricity constraints as well as the high sovereign credit risk.
There were new reforms introduced for infrastructure financing and delivery aiming to optimize the value chains to be effectively efficient, which will strengthen the public investment management and attract private sector participation.
Climate change and new energy vehicles also were mentioned in the budget with the government outlining their strategies for these topics and industries going forward.
In terms of changes to taxes related to property, there were no changes. Capital Gain Tax, Withholding Tax and Transfer Duty remain unchanged.
Below sets out in more detail all the relevant changes and tax rates for the forthcoming year:
INCOME TAX: INDIVIDUALS & TAX
Individuals & Special Trusts
| Taxable Income (R) | Rate of Tax (R) |
| 0 – 237 100 | 18% of taxable income |
| 2367 100 – 370 500 | 42 678 + 26% of taxable income above 237 100 |
| 370 501 – 512 800 | 77 362 + 31% of taxable income above 370 500 |
| 512 801 – 673 000 | 121 475 + 36% of taxable income above 512 800 |
| 673 001 – 857 900 | 179 147 + 39% of taxable income above 673 000 |
| 857 901 – 1 817 000 | 251 258 + 41% of taxable income above 857 900 |
| 1 817 001 and above | 644 489 + 45% of taxable income above 1 817 000 |
Trusts other than Special Trusts
| Rate of 45% |
INCOME TAX: COMPANIES, SMALL BUSINESS CORPORATIONS & MICRO BUSINESSES
Companies
| Type | Rate of Tax (R) |
| Companies | 27% of taxable income * |
*for years of assessment ending on any date between 1 April 2024 and 31 March 2025
Small Business Corporations
| Taxable Income (R) | Rate of Tax (R) |
| 0 – 95 750 | 0% of taxable income* |
| 95 751 – 365 000 | 7% of taxable income above 95 750* |
| 365 001 – 550 000 | 18 848 + 21% of taxable income above 365 000* |
| 550 001 and above | 57 698 + 27% of taxable income above 550 000* |
*for years of assessment ending on any date between 1 April 2024 and 31 March 2025
Micro Businesses
| Taxable Turnover (R) | Rate of Tax (R) |
| 0 – 335 000 | 0% of taxable turnover* |
| 335 001 – 500 000 | 1% of taxable turnover above 335 000* |
| 500 001 – 750 000 | 1 650 + 2% of taxable turnover above 500 000* |
| 750 001 and above | 6 650 + 3% of taxable turnover above 750 000* |
*for years of assessment ending on any date between 1 April 2024 and 31 March 2025
CAPITAL GAINS TAX
Capital Gains on the disposal of assets are included in taxable income.
| Maximum Effective Rate of Tax | |
| Individuals & Special Trusts | 18% |
| Companies | 21.6% |
| Other Trusts | 36% |
Events that trigger a disposal include a sale, donation, exchange, loss, death or emigration. The following are some of the specific exclusions:
- R2 million gain or loss on the disposal of a primary residence;
- Most personal use assets;
- Retirement benefits;
- Payments in respect of original long-term insurance policies;
- Annual exclusion of R40 000 capital gain or capital loss is granted to Individuals and Special Trusts;
- Small business exclusion of capital gains of R1.8 million for individuals (at least 55 years of age), when a small business with a market value not exceeding R10 million is disposed of, and
- Instead of the annual exclusion, the exclusion granted to individuals is R300 000 for the year of death.
WITHHOLDING TAX
Interest
A final tax at a rate of 15% is imposed on interest from a South African source payable to Non Residents. Interest is exempt if payable by any sphere of the South African Government, a bank, or if the debt is listed on a recognized exchange.
Disposal of Immovable Property
A provisional tax is withheld on behalf of Non Resident sellers of immovable property in South Africa, to be set off against the normal tax liability of the Non Resident.
| Type | Rate of Tax |
| Non Resident Individual | 7.5% |
| Non Resident Company | 10% |
| Non Resident Trust | 15% |
TRANSFER DUTY
Transfer Duty is payable at the rates below on all transactions which are not subject to VAT.
| Value of Property (R) | Rate |
| 0 – 1 100 000 | 0% |
| 1 100 000 – 1 512 500 | 3% of the value above 1 100 000 |
| 1 512 500 – 2 117 500 | 12 375 + 6% of the value above 11 512 500 |
| 2 117 501 – 2 722 500 | 48 675 + 8% of the value above 2 117 500 |
| 2 722 501 – 12 100 00 | 97 075 + 11% of the value above 2 722 500 |
| 12 100 001 and above | 1 128 600 + 13% of the value above 12 100 000 |
For further information and a more detailed breakdown of the Budget you can visit the SARS website.