Following the announcement of new tax changes for the 2017/18 financial year by finance minister Pravin Gordhan, the country’s tax tables have been updated.
One of the biggest changes announced by the finance minister is the introduction of a new tax bracket, aimed at the country’s wealthy.
South Africans who earn more than R1.5 million a year will form part of a new tax bracket which will be taxed at 45%, on top of limited bracket-creep relief for existing tax brackets.
Together these changes are expected to raise and additional R16.5 billion in tax revenue, which will cover a large bulk of the R28 billion shortfall. The other R11.5 billion will come form other sources, Gordhan said.
These other sources include:
- An increase in the dividend withholding tax rate from 15% to 20%, to raise R6.8 billion;
- A 30 cent per litre increase in the general fuel levy and a 9 cent per litre in the road accident levy;
- An increase in the excise duties of alcohol and tobacco – the so-called ‘sin tax’ – of between 6% and 10%.
This is how the new tax tables look:
|Taxable income||Tax rate|
|Under R189 880||18% of taxable income|
|R189 881 – R296 540||R34 178 + 26% of taxable income above R189 880|
|R296 541 – R410 460||R61 910 + 31% of taxable income above R296 540|
|R410 461 – R555 600||R97 225 + 36% of taxable income above R410 460|
|R555 601 – R708 310||R149 475 + 39% of taxable income above R555 600|
|R708 311 – R1 500 000||R209 032 + 41% of taxable income above R708 310|
|R1 500 001 and above||R533 625 + 45% of taxable income above R1 500 000|
These are the updates to the tax rebates and tax thresholds for 2017/18
|Secondary (persons 65 and older)||R7 479|
|Tertiary (persons 75 and older)||R2 493|
|Below age 65||R75 750|
|Age 65 to below 75||R117 300|
|Age 75 and older||R131 150|