Tax Related Highlights:

Tax policy proposals are expected to result in an overall increase in certain taxes and levies which will raise an additional R36 billion revenue. 
The more significant tax policy proposals are noted below:
·         Predicted for the past few years, but never materialising until now, the VAT rate will increase from 14% to 15%, with effect from 1 April 2018, which will raise an additional R22.9 billion revenue. It is felt that an increase in the VAT rate will have the least harmful effect to economic growth
Social grants will be increased, albeit minimally, to compensate the poor for the increased VAT rate. Furthermore, government feels that this sector will not be as impacted by the increase given the existing zero rating applicable to certain ‘basic’ food items
·         An overall 52c/litre increase in fuel levies, made up of a 22c/litre increase in the general fuel levy and 30c/litre on the road accident fund levy, both effective from 4 April 2018. This is likely to have an inflationary effect on the economy given the knock on effect on the cost of transport which will translate into an increase in the cost of goods to the consumer. It is estimated that this will raise an additional R1.2 billion revenue
·         The dutiable value of an estate exceeding R30 million will be taxed at a rate of 25% instead of the current rate of 20%, effective from 1 March 2018 (expected to raise R150 million revenue)
·         In respect of donations exceeding R30 million, donations tax will be imposed at 25% instead of the current rate of 20%
·         A 6% to 10% increase in excise duties on alcoholic beverages and an 8.5% increase in duties on tobacco products – potentially raising R4.3 billion additional revenue
·         Below inflation adjustments to personal income tax brackets will potentially raise an additional R6.8 billion in revenue
·         Increase in ad valorem customs duties on ‘luxury’ items consumed by wealthier individuals – for example, cars and ‘smart phones’
·         Increases in the plastic bag levy, the motor vehicle emissions tax and the levy on incandescent light bulbs to promote eco-friendly choices
·         Carbon tax to be implemented from 1 January 2019.

Lyle & Associates
Professional Accountants (South Africa)
Pr 412- SARS95DB077

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                                                                                                                                                                    Acknowledgements: SAICA