1. Personal Income Tax Rate Increase
For the first time since 1995, some South African taxpayers will have to pay more tax than the previous year. Effective 01 March 2015, the marginal income tax rates have increased with 1% from the second lowest to the highest brackets. The highest rate used to calculate personal income tax is now set at 41% (previously 40%).
2. Proposed UIF contribution limited to R10 per month
A proposal to decrease the earnings threshold for UIF calculations to R1000 per month is awaiting confirmation. If this proposal is implemented, it means that the maximum UIF contribution paid by the employee and the employer each month will decrease from R148.72 each to R10.00 each.
3. Fuel levy increases totalling 80.5c per liter
The general fuel levy will increase by 30.5c per liter and the Road Accident Fund levy will increase by 50c per liter. This increase becomes effective 01 April 2015. This is in addition to the general price increase taking place on 04 March 2015.
4. Less tax for start-ups and micro business
Turnover tax has been reduced massively by reducing the highest rate of 6% down to 3%. The turnover threshold has also more than doubled from R150 000 to R335 000. Small business with up to R1 million rand turnover per annum will pay less tax this year.
5. Subsistence Allowance adjsutments
The limit on non-taxable subsistence payments for local business travel will be at least R109.00 per day if the allowance should cover incidental expenses only. If the allowance includes provision for meals as well than the non-taxable limit is R353.00 per day. Payments made with regards to travel abroad will be subject to the daily limits set per country (available on http://www.sars.gov.za).
6. Proposed electricity levy increase
To assist with managing the demand of electricity, a temporary increase of 2c/kWh will be implemented. This will set the electricity levy at 5.5c/kWh until the current electricity shortage has been addressed.
7. Employment Tax Incentive – amended “gross up” calculations
Effective 01 March 2015, ETI claims for employees not employed for a full month must be subject to a “time worked” test. Anyone who is employed to work part-time or for a period less than a full month can only qualify to be included in an ETI claim calculation after the actual earnings have been “grossed up” to the earnings equivalent of 160 hours per month.
8. Postponement of Retirement Reform
The widely discussed and much anticipated amendments to the taxation of retirement fund contributions and payouts have been postponed to 01 March 2016. The only change that is effective 01 March 2015 is the elimination of the tax deductibility of income protection policy contributions.
9. Transfer duty relief
Properties of up to R750 000 will no longer attract any transfer duties while in previous years properties up to R600 000 were exempt. The new rates will also decrease the duties payable on properties valued up to R2,25 million.
10. Tax free travel reimbursements
The rate per kilometer used to pay out tax free travel reimbursements has been lowered to R3.18 per km (previously R3.30)