On 26 February 2020, Finance Minister Tito Mboweni gave the much anticipated budget speech. Some of the key things that came out of the budget speech are:
- Transfer duties on the purchase of properties has been adjusted. Previously you would only pay transfer duty on any amount above R900 000. From 1 March 2020, you will only pay transfer duty on amounts above R1 000 000. That is a tax relief for anyone who is about to buy a new property.
- Tax free savings accounts limits has been adjusted. Previously you would get a annual tax free contribution allowance of R33 000. From 1 March 2020, this allowance will increase to R36 000 per annum. That is a tax relief for anyone who has a tax free savings account or anyone that is thinking of getting one.
- Fuel levy has increased by 25 cents a litre. 16 cents of that increase will be a general fuel levy and 9 cents will be allocated to the Road Accident Fund.
- Levies on cigarettes will increase by 74 cents per packet of 20’s. Beer will increase by 8 cents per 340ml can and wine will increase 23cents per 750ml bottle.
- State grants for old age, disability and care dependency will increase by R80 to be R1860 per month.
- Tax from income earned from foreign remuneration has been adjusted. Previously anyone who earned foreign income up to R1 million per annum did not have to pay tax on that income. From 1 March 2020, that amount increases to R1.25 million. That is tax relief for anyone who earns foreign remuneration.
- Personal income tax brackets and rebates will be increased by 5.5%. What this means is that there will be tax relief for all tax payers as the tax bands and rebates will be broadened. See example below:
- Medical tax credits are a reduction of tax for anyone who has a medical aid and is a premium payer. They have been adjusted. Previously you would get a tax credit of R310 per month for the first two beneficiaries on a medical aid and R209 for all other beneficiaries. From 1 March 2020, you will get R319 per month for the first two beneficiaries on a medical aid and R215 per month for all other beneficiaries.
- Government and NEDLAC (National Economic Development and Labour Council) have agreed to the harmonisation of all retirement funds , including the annuitisation of provident funds with effect from 1 March 2021.