The backdrop to this year’s budget is two years of Covid-19 and our future recovery efforts. Households are cash-strapped and trying to make ends meet arising from job losses and business failures due to the ravages of the pandemic.
Though, in the main, the budget is “better than expected a year ago”, job losses, mass unemployment, and poor service delivery still loom large.
- Personal tax tables for individuals and special trusts
The table below reflects the proposed personal tax tables for individuals and special trusts:
Income tax year 2022/2023
| Taxable income (R’s) | Rates of tax |
| R0 – R226 001 (from R216 200) | 18% of each R1 |
| R226 001 – R353 100 | R40 680 + 26% of the amount above R226 000 |
| R353 101 – R488 700 | R73 726 + 31% of the amount above R353 100 |
| R488 701 – R641 400 | R115 762 + 36% of the amount above R488 700 |
| R641 401 – R 817 600 | R170 734 + 39% of the amount above R641 400 |
| R817 601 – R1 731 600 | R239 452 + 41% of the amount above R817 600 |
| R1 731 601 and above (previously from R1 577 300) |
R614 192 + 45% of the amount above R1 731 600 |
- Tax rebates
The table below reflects the proposed tax rebates for individuals:
The primary, secondary and tertiary rebates will be increased by 4.5%.
| Tax rebates | 2021/22 tax year | 2022/23 tax year |
| Primary rebate | R15 714 | R16 425 |
| Secondary rebate (applicable to taxpayers aged 65 to 74) | R8 613 | R9 000 |
| Tertiary rebate (applicable to taxpayers aged 75 and older) | R2 871 | R2 997 |
- Tax thresholds
The change in the rebate will mean that persons with taxable income as follows will pay no tax.
| Tax thresholds | 2021/22 tax year | 2022/23 tax year |
| Below age 65 | R87 300 | R91 250 |
| Age 65 to 74 | R135 150 | R141 250 |
| Age 75 and over | R151 100 | R157 900 |
The few examples below illustrate the difference in tax paid by individuals in the 2022/23 tax year from that paid in the 2021/2022 tax year based on the tax tables and rebates.
| Individuals (younger than age 65) 2022/2023 | |
| Taxable income (R) | Tax payable |
| R200 000 | -R711 (-3.5 %) |
| R1 000 000 | -R4 862 (-1.6%) |
| R500 000 | -R3 320 (-3.1%) |
| R2 000 000 | -R7 862 (-1.1%) |
| Individuals (Age 65 – 74) 2022/2023 | |
| R200 000 | -R1 098 (-9.4%) |
| R500 000 | -R3 707 (-3.8%) |
| R1 000 000 | -R5 249 (-1 1.%) |
| R2 000 000 | -R8 249 (-1.1%) |
| Individuals Age 75 and over 2022/2023 | |
| R200 000 | -R1 224 (-13.9 %) |
| R1 000 000 | -R3 833 (-4%) |
| R2 000 000 | – R5 375 (-1.1 %) |
| R500 000 | -R8 375 (-1.2%) |
- Estate duty and donations tax
No changes were announced.
With effect from March 1, 2018, the estate duty rate was increased from 20% to 25% for estates worth R30-million and more. To limit the staggering of donations to avoid the higher estate duty rate, any donations above R30-million in one tax year are also taxed at 25%.
- VAT
There was no increase in the VAT rate from the current 15%.
- Capital gains tax (CGT)
No changes were announced to the taxation of capital gains.
The capital gains tax inclusion rates remain as follows:
- Individuals: 40% (the maximum effective capital gains tax rate for individuals remains 18%).
- Companies: 80% (this remains the same at an effective rate of 22.4%).
- Trusts: 80% (the effective rate applicable to trusts remains at 36%).
- Special trusts: The maximum effective rate applicable to special trusts remains at 18%.
- Interest exemption
No change. The interest rate exemptions will not be adjusted for inflation.
Individuals will be encouraged to invest in the new tax-free savings accounts instead.
In the circumstances, the threshold at which tax is paid on interest income remains the same.
| Interest exemption for individuals 2022/23 | |
| Underage 65 | R23 800 |
| Age 65 and over | R34 500 |
- Medical tax credits
The government proposes an inflationary increase to the value of the medical tax credits in 2022/2023 from R332 per month to R347 for the first two beneficiaries, and from R224 per month to R347 for the remaining beneficiaries. It is a welcome surprise that we are continuing to see inflationary increases in the medical tax credits because it was announced in the 2018 Budget Review that the credit would be adjusted by less than inflation to help fund the rollout of national health insurance over the medium term.
| Monthly medical tax credits for all taxpayers |
2021/22 | 2022/2023 |
| Member | R332 | R347 |
| First beneficiary | R332 | R347 |
| Additional beneficiaries | R224 | R234 |
| Family of four | R1 112 | R1 162 |
| Family of four annual credit | R13 448 | R13 944 |
- Tax-free savings accounts
No change.
The amount that can be contributed to a tax-free savings account is R36 000 per year. The lifetime allowance is R500 000.
- Transfer duty
No change.
- Social security
The social security grants are increased as follows:
- Tax-free savings accounts
No change.
The amount that can be contributed to a tax-free savings account is R36 000 per year. The lifetime allowance is R500 000.
- Transfer duty
No change.
- Social security
The social security grants are increased as follows:
| 2021/2022 | 2022/2023 | |
| State old age | R1 890 | R1 985 |
| (over 75) | R1 890 | R2 005 |
| War veterans | R1 910 | R2 005 |
| Foster care | R1 050 | R1 070 |
| Child support grant | R460 | R480 |
| Covid-19 relief *extended for 12 months | R350 | R350 |
- Indirect taxes
| Total fuel levies General fuel levy Road Accident Fund levy |
No increase |
| Carbon tax Carbon fuel levy |
Increase from R134 to R144, effective from January 1, 2022. Increase by 1c to 9c per litre for petrol, and 10c per litre for diesel, from April 6, 2022. |
| Tobacco products | Increase of 6.5% A packet of cigarettes will cost an additional R1.03; 25g of piped tobacco will cost an extra 37c; and A 23g cigar will be R6.77 more expensive. |
| Vaping products | Levy to be imposed for the first time of R2.90 per ml |
| Sugar tax | After three years of no changes, the health promotion levy will be increased to 2.31c per gram of sugar. |
| Alcohol | Excise duties on alcohol and tobacco will increase by between 4.5% and 6.5%t.
The increases mean that as from today: |
- Plastic bag levy
The plastic bag levy will increase from 25c per bag to 28c.
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