PERSONAL TAX: Some relief but it’s slight
Bad news for the rich: increased duty will squeeze more money from high-value estates
Last year there was a painful increase in the top marginal income-tax rate to 45%. There are no similar fireworks this year; the same rate applies for those earning from R1.5m/year. Similarly, there are no changes to brackets above R555,000. At lower levels, changes to tax brackets and rebates offer 3.1% relief. Andrew Wellsted, a partner at the Norton Rose law firm, says government realises SA has a very small tax base, with 100,000 people paying at least 27% income tax. It is more palatable to increase taxes stealthily by adjusting brackets than keep increasing the top marginal rate. An additional R6.8bn is likely to be collected next year through the monetary illusion of keeping taxes "unchanged" but having people pay more in real terms as they move up the earnings ladder. About 75% of taxpayers earn less than R350,000 so could be eligible for free higher education. They account for 19% of income tax payments. SA’s personal income tax burden has increased from 8.3% of GDP in 2011...
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