Taxand South Africa provides a summary of the 2017 South African budget speech.
The South African Minister of Finance indicated that South Africa needs to raise an additional R28-billion in tax revenues. The increase in revenue will be funded mainly by the following measures:
A new maximum marginal income tax rate of 45% for those with taxable income over R1.5-million per annum (an increase from the current maximum rate of 41%)
An increase in the dividend withholding tax rate from 15% to 20% (effective 22 February 2017). The exemption and rates for foreign dividends will also be adjusted in line with the new rate, effective for years of assessment commencing on or after 1 March 2017
An increase of 30 cents per litre in the general fuel levy and nine cents per litre in the Road Accident Fund levy
Increases in excise duties for alcohol and tobacco of between 6% and 10%
No change to the value-added tax (VAT) rate of 14%
The transfer duty-free threshold for residential properties will be increased from the current R750 000 to R900 000
No increase in the corporate tax rate of 28% (which is considered to be higher than the Organisation for Economic Co-operation and Development average of 25%)
The income tax rate applicable to income retained by trusts will increase from 41% to 45%
Withholding tax on immovable property sales by non-residents will be increased from 5% to 7.5% for individuals, 7.5% to 10% for companies and 10% to 15% for trusts
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Taxand's Take
The South African Minister of Finance delivered his 2017 budget speech on 22 February 2017. He indicated that South Africa needs to raise an additional R28-billion in tax revenues and reduce spending by a total of R26-billion over the next two years.
