Budget 2018 / 2019

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The following is a summary of the tax related budget proposals announced by the Minister of Finance.

Budget highlights

• A one percentage point increase in VAT to 15% with effect from 1 April 2018
• The VAT increase will result in additional R22.9 billion to the fiscus
• No adjustments to the top four income tax brackets for individuals
• Below inflation adjustments to the bottom three brackets for individuals
• Plastic bag levy to be increased by 50% to 12c per bag with effect from 1April 2018
• Fuel taxes increase with effect from4 April 2018:
• A 22c/litre increase in the general fuel levy
• A 30c/litre increase in the Road Accident Fund
• Higher as valorem excise duties for luxury goods with effect from 1 April 2018
• E.g. Motor vehicle will be increased from 25% to 30%
• Increased estate duty with effect from 1 March 2018:
• To be levied at 25% for portion of estates above R30 million
• Consequently, donations in excess of R30 million will also be taxed at 25%
• Carbon Tax to be implemented 1 January 2019
• Health promotion levy(sugar tax) will be implemented with effect from 1 April 2018
• Minister of Finance to approve six special economic zones for additional tax relief
• Proposals:
• Increase ”official rate of interest” to a level closer to the prime rate of interest
• Remove fringe benefit tax for preferential interest rates on low-cost housing loans to qualifying employees.