Budget 2017: High earners to pay more in tax
Finance Minister Pravin Gordhan says the 2017 budget reflects a balance between spending commitments and ensuring the long-term health of public finances.
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Speaking in Parliament earlier, Gordhan said the tax revenue for 2016/ 2017 is likely to be R1.14-trillion - an increase of 7% from the previous year. He says the high-income group will be paying increased taxes.
"The tax proposals this year will raise an additional R28-billion by comparison with revenue estimates based on full adjustment of personal income tax and excise duties for inflation. The main tax proposals are, honourable members, a new top personal income tax rate of 45% for those with taxable incomes above R1.5-million," he said.
The Minister said the proposed expenditure for 2016/ 2017 totals R1.56-trillion while interest on debt amounts to R169-billion.
He's added that transformation should produce inclusive economic growth, mobilise investment and empower the masses while creating new resources for social change.
The projection for economic growth is expected to increase from 0.5% last year to 1.3% in 2017.
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The main tax proposals are:
- A new top personal income tax rate of 45 percent for those with taxable incomes above R1.5 million.
- An increase in the dividend withholding tax rate from 15 percent to 20 per cent.
- Limited bracket creep relief, increasing the tax free threshold from R75 000 to R75 750.
- An increase of 30c/litre in the general fuel levy and 9c/litre in the road accident fund levy.
- Increases in the excise duties for alcohol and tobacco, of between 6 percent and 10 percent.
- Gordhan says tax on sugary beverages will be implemented later this year once approved by Parliament and signed by the president.
