Last week Pravin Gordhan, Finance Minister to President Jacob Zuma, delivered his final budget speech for the current administration. Financial gurus, economists, financial planners and all those money-astute, sat rapt and listened with educated ears to the updated blueprints for South Africa’s future.
This blog is not written with them in mind, but rather for those who know that there are some changes and simply wish to know what the bottom line is. If you are a taxpayer, here’s the skinny on what to expect.
The biggest question; “Will I be paying more personal tax?”. The quick answer is ‘No’.
Those earning under R250k per annum will be giving a slight relief and the tax threshold, as per tradition, has been increased, you will now only be taxed if you earn in excess of R5 891 per month (R70 700 per annum). If you earned R20 830 every month in 2013, you would’ve paid R3 235 in monthly tax, in 2014 you will only pay R3 130 every month.
RETIREMENT LUMP SUM WITHDRAWALS
If you’re nearing an age where you’d like to consider cashing in on all of your retirement savings, then you’ll be pleased to know that there has been a significant increase in the non-taxable amount that you can now withdraw. In 2013, only R315k was tax free, this has been pushed up to a sizeable R500k – that’s an increase of around 60%!
It certainly makes retirement investments seem considerably more attractive.
SIN TAX AND FUEL LEVIES
The general fuel levy and the road and accident fund, despite the recent e-tolling, will be increasing by 20c per litre of fuel bought.
For drinks and smokes, you’ll be forking out a little more too:
– 9c more per 340ml beer or cider
– 27c more per 750ml bottle of wine
– 68c more per pack of cigarettes
– R4.80 more per bottle of whiskey
That’s the skinny on the budget speech for 2014. If you have any questions, or would like to have a more in depth explanation of how the full budget speech might affect your financial planning – feel free to send me an email!