BUDGET 2012/2013
South
African budget speech 2012, presented by Finance Minister Pravine
Gordhan, is at a poised time for South Africa. As the Minister put it "a challanging but hopeful time."
Highlights
The speech has focused on the challenges of creating jobs, reducing poverty, building infrastructure and expanding the economy. There is an expected expenditure of R4.5 trillion for the year.
- R77.8 billion for job creation, small enterprise development and youth employment;
- R3.2 trillion for 43 major infrastructure projects, R300 billion to the energy sector and R262 billion in transport and logistics;
- R7.7 billion to Working for Water and Working on Fire;
- R236 billion for Education;
- An additional R12.3 billion over the next three years to strengthen the healthcare system.
- R120 billion for human settlement upgrading, municipal services and water infrastructure;
Tax Tables
- Taxable income (R)
- Rates of tax
- 0 – 160 000 18% of each R1
- 160 001 –250 000 R28 800 +25% of the amount above R160 000
- 250 001 –346 000 R51 300 +30% of the amount above R250 000
- 346 001 –484 000 R80 100 +35% of the amount above R346 000
- 484 001 –617 000 R128 400 +38% of the amount above R484 000
- 617 001 and above R178 940 +40% of the amount above R617 000
Rebates of Tax
Primary R11 440
Secondary (Persons 65 and older) R6 390
Tertiary (Persons 75 and older) R2 130
Tax Threshold
Below age 65 R63556
Age 65 to below 75 R99 056
Age 75 and over R110 889
Dividends Tax
The termination of secondary tax on companies and the implementation of Dividend tax is now effective 31 March 2012. The dividend tax will be introduced at 15% which is higher than the STC of 10%.
Capital Gains Tax
Capital gains tax has increased for individuals and special trusts to 33.3%. Companies and other trusts has increased to 66.6%. No mention has been made yet of doing away with Estate duty. The various Capital Gains tax exclusions have been increased.
Small Business Relief
There is some relief for small business and it is worth structuring your business properly to take advantage of this relief.
Tax threshold has increased to R63556.
The next bracket is where the most benefit is recieved. The tax rate has decreased from 10% to 7% and the threshold has increased to R350000.
Above this it is taxed at the normal 28%.
Budget Deficit
The budget deficit for 2012/2013 is expected to be 4.6 per cent, while 3 per cent is projected for 2013/2014.
Growth
GDP for 2012 is expected to fall to 2.7 per cent. This is considerably low for the region which is expected to have growth of 5.5%. While 3.6 per cent is projected for 2013 which is still below par. We echo the sentiments of the Minister when he says "we are not doing well enough in growing our economy and creating jobs for our young people."
Financial Management and Combating Fraud
A point of the Minister was to mention that the efforts of public and government need to be improved to ensure that corruption is prevented and that the funding allocated is well spent.
He further raised that missmanagement needs to be dealt with, "It has been necessary to take steps to address financial management weaknesses that have undermined service delivery and put financial sustainability at risk in several provinces."
Working together
It is now time that we all realise that "haircuts" are necessary. We look forward to the public funds been spent as allocated, within the tightened budget framework.
The support of the business sector, particularly small business in looking for opportunities to grow our space and thereby grow our economy is needed.
The budget speech strategy is a long term plan. We should emulate our plans for the long term by implementing the changes now, that will benefit the country and our business in the long term.
