Budget Speech 2013: The highlights
The highlight for most in Gordhan’s 2013 Budget speech was the tax relief of R7bn for individual tax payers. This is especially salient in this challenging economic environment. We will obviously see how this relief reveals itself over the next few months.
Here are some of the other highlights of the Budget:
SKILLS DEVELOPMENT LEVY (SDL)
Employers with a payroll of R500 000 or more per annum must account for SDL. SDL is calculated at 1% of the leviable amount of the monthly payroll and includes Directors fees.
EMPLOYERS CONTRIBUTION TO RETIREMENT FUNDS
From March 2014 an employer’s contribution to retirement funds on behalf of an employee will be treated as a taxable fringe benefit.
Individuals will be allowed to deduct up to 27.5% of the higher of taxable income for contributions to pension, provident and retirement annuity funds. The maximum annual deduction will be R350 000.
MEDICAL TAX CREDITS
The medical aid capping system, which was introduced in 2012, will continue to be used in the 2013/14 tax year.
The medical aid tax credit is R242 a month for the first two beneficiaries (including the principal member). Thereafter it is R162 for each additional dependent.
SUBSISTENCE ALLOWANCES AND ADVANCES
An employee is entitled to receive a subsistence allowance when he is required to spend at least one night away from his place of residence.
The value of the allowance or advance where the accommodation is in South Africa is:
R319 per day for meals and incidental costs
R98 per day for incidental costs only.
A youth employment tax incentive aimed at encouraging companies to employ young workers will be tabled for consideration by parliament. This is targeted at supporting young workers and those employed in special economic zones.
Excise duties on alcohol and tobacco products will go up between 5% and 10%.
•Tax on malt beer increases by 7.5c, to R1.08 per 340ml can
•Tax on unfortified wine increases by 15c per 750ml bottle
•Tax on ciders and alcoholic fruit beverages increases by 7.3c per 330ml bottle
•Tax on spirits increases by R3.60, to R39.60 per 750ml bottle
•Tax on cigarettes increases by 60c, to R10.92 per packet of 20
I’m sure this is not going to force us to drink less or quit smoking.
Until next week