High-income earners to pay 45% tax
Finance Minister Pravin Gordhan said a new tax bracket will be introduced for those earning more than R1.5 million a year.
CAPE TOWN - High-income earners can prepare to hand over more of their paycheque to the tax man this year.
Delivering his Budget Speech in Parliament on Wednesday afternoon, Finance Minister Pravin Gordhan said a new tax bracket will be introduced for those earning more than R1.5 million a year.
Faced with a personal income tax revenue shortfall of R30 billion due to a slowdown in the economy, government plans to tax high-income earners 45% of their taxable income.
Around 100 000 taxpayers will be affected.
The previous top bracket of 41% was set at just more than R701,000.
Overall, adjustments to the personal income tax tables are expected to raise an extra R16.5 billion.
“We believe in a progressive tax system… important for redistribution of wealth.”
Treasury is predicting a total tax revenue for the 2016/17 financial year of R1.14 trillion – an increase of 7% on the previous year.
Treasury is offering marginal relief to low-income earners, with the tax-free threshold being raised by R750 to R75,750.
The threshold abovewhich transfer duties are payable in the affordable housing market will also be increased from R750 000 to R900 000.
Sars will continue to clamp down on tax avoiders and it has already received disclosures of foreign assets that will yield revenue of around R600 million.
(Edited by Winnie Theletsane)