\t\t\t<\/p>\n
In the run-up to the 2012 Budget many wishes and warnings were addressed to Minister Gordhan.<\/p>\n
Let\u2019s see who got what they asked for (the \u201chaves\u201d) and who were denied (the \u201chave-nots\u201d):<\/p>\n
Requested:<\/strong> The SA Institute of Professional Accounts asked that individual taxpayers be spared. According to SAIPA they \u201c\u2026had been contributing an ever-growing share of South Africa\u2019s revenues in the past five years.\u201d<\/p>\n Verdict: <\/strong> Modest tax relief of R9.5bn was proposed. This was \u201c\u2026 to ensure that the direct personal income tax burden on individuals remained reasonable.\u201d According to the Minister personal income tax was the basis for an equitable and progressive tax system. The top marginal tax rate for individuals remains at 40%. However, from 1 March 2012, the CGT inclusion rate for individuals and special trusts increases to 33.3% (from 25%) and for companies and other trusts to 66.6% (from 50%). So with the one hand the Minister gave and simultaneously took substantially with the other.<\/p>\n Requested:<\/strong> Business Unity SA (\u201cBUSA\u201d) worried that SA\u2019s \u201cfiscal wiggle room was shrinking.\u201d It wanted the Minister to focus on \u201cstructural factors that could strengthen economic performance over the longer term.\u201d The focus had to be the promotion of growth and job creation.<\/p>\n Verdict: <\/strong> \u201cTo drive back unemployment\u201d got a mention right at the outset of the Minister\u2019s Budget Speech. The Minister\u2019s focus will be on the unemployed youth and therefore special employment initiatives had to be a priority in the present circumstances. On the financial side: a Budget deficit of the 4.6% of GDP is projected for 2012\/13. That will reduce to 3 % of GDP in 2014\/15. Public debt will stabilise at 38% of GDP. Total spending will be R1.1 trillion next year, i.e. some 32% of GDP.<\/p>\n Requested:<\/strong> BUSA and many others warned that \u201cwelfare payments could not continue out of proportion with taxes.\u201d SA currently has 15m recipients of social grants and this has grown 300% during the last decade.<\/p>\n Verdict: <\/strong> Expenditure on social grants will grow from R105bn in 2012\/13 to R122bn in 2014\/15. In his speech the Minister mentioned that 16m South African actually received social grants and that the increases given in the Budget would be reassessed if inflation continued to rise.<\/p>\n Requested:<\/strong> Everyone wondered where money for the National Health Insurance (\u201cNHI\u201d) would come from? There were warnings that SA could not afford the NHI.<\/p>\n Verdict: <\/strong> NHI will now be phased in over 14 years from 2012\/13. It will require new funding sources. Options include an increase in VAT, a payroll tax on employers, a surcharge on income tax on individuals or a combination of these. The mention of a VAT increase is interesting seeing that VAT has always been viewed a politically-sensitive tax.<\/p>\n Requested:<\/strong> Economist Mike Shussler warned that \u201c\u2026 while SARS has become more effective, a high effective tax rate constrains companies from investing in a meaningful way.\u201d Government should learn to help companies otherwise SA would lose investment.<\/p>\n Verdict: <\/strong> The Dividend Withholding Tax takes effect on 1 April 2012 and will be at 15% (5% higher than the STC it replaces). A whole section in the Speech was devoted to \u201cSupport to business sector growth\u201d. This included, amongst others, a simplified tax regime for small business, a draft policy framework and legislation that has been published for special economic zones and a venture capital incentive for junior mining companies.<\/p>\n Requested:<\/strong> Numerous commentators asked that so-called \u201cstealth taxes\u201d should be curbed. This covered moans about the fuel levy, toll fees, administered prices, increases in electricity tariffs, a possible carbon tax, etc.<\/p>\n Verdict: <\/strong> No relief in respect of sin taxes was to be expected. Excise duties on tobacco increases by between 5 and 8.2%. That on alcoholic beverages will increase between 6<\/strong> \u2013 20%. Following public consultation, government has revised its concept design for a carbon tax and a draft policy paper will be published for comment in 2012. The electricity levy will be increased by 1c\/KWh to 3.5c\/KWh. The general fuel levy increases by 20c\/l and the Road Accident Fund levy by 8c\/l (from 4 April 2012).<\/p>\n Requested:<\/strong> Recently there was a lot of talk regarding \u201cHigh Net Worth Individuals\u201d (\u201cHNWI\u201d). Some mentioned a Warren Buffet-type \u201cwealth tax.\u201d<\/p>\n Verdict: <\/strong> A specific wealth tax on the ultra-rich did not happen. However, according to the Minister there is room to improve service to this segment. But, they will be a \u201cfocus area for SARS in the coming year.\u201d Certain toys of the HNWI\u2019s will also become more expensive. Styled as a \u201cTax on luxury goods\u201d, there will be, from 1 October 2012, an ad valorem tax on certain aeroplanes and helicopters (at 7%) as well as on certain motorboats and sailboats (at 10%).<\/p>\n Requested:<\/strong> Everybody in SA, without exception, asked on their wish-lists for taxpayers\u2019 monies to be spent wisely and in the right places. The wide-spread wasteful expenditure had to be addressed and those responsible taken to task. Otherwise \u201c\u2026government would lose its moral right to tax.\u201d<\/p>\n Verdict: <\/strong> The Budget proposals state: \u201cGovernment is taking steps to improve the efficiency of public expenditure and to root out corruption.\u201d In his speech the Minister said that \u201cwe have to do more with less.\u201d The Minister emphasised that fraud and corruption would be combated through changes to procurement policies and practices and tough enforcement of the law. It\u2019s interesting that a whole section of the Budget Speech gave details as to how the wasteful expenditure would be stamped out going forward.<\/p>\n Johan van der Walt, Tax Director, Cliffe Dekker Hofmeyr<\/strong><\/p>\n See also: 2012 Budget Speech<\/p>\n \t\t<\/p>\n","protected":false},"excerpt":{"rendered":" In the run-up to the 2012 Budget many wishes and warnings were addressed to Minister Gordhan. Let\u2019s see who got what they asked for (the \u201chaves\u201d) and who were denied (the \u201chave-nots\u201d): Requested: The SA Institute of Professional Accounts asked that individual taxpayers be spared. According to SAIPA they \u201c\u2026had been contributing an ever-growing share […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[1289,5],"class_list":{"0":"post-8237","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-mype","8":"tag-port-elizabeth-2","9":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/8237","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=8237"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/8237\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=8237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=8237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=8237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}