After inflation and increases in other indirect taxes are taken into account, the R 8.1 billion in tax relief that Finance Minister Pravin Gordhan announced in this week’s Budget, may not amount to much for you in the tax year ahead.
The 2012 Budget tax relief is intended to compensate for the effects of inflation as well as some bracket creep. Tax specialists have, however, commented that after adjusting for inflation, taxpayers on incomes up to R140 000 a year, will not benefit from the 2011/2012 tax reductions. They continue by saying that taxpayers at an annual income level of R600 000 and above will receive a marginal benefit of R724 per annum. This makes it abundantly clear that there is not much to enthuse about in Minister Gordhan’s offerings.
A brief summary of the important changes that may be of interest to taxpayers are listed below:
Income Tax Threshold Increased:
Below the age of 65: R59 750 (2011 – R57 000)
Aged 65 and over: R93 150 (2011 – R88 528)
Aged 75 and over: R104 261 (2011 – not applicable)
Tax Rebates Increased:
Primary (for everyone): R10 755 (2011 – R10 260)
Secondary: R6 012 (2011 – R5 675)
Third: R2 000 (2011 – not applicable)
Top Margin Tax Bracket:
R580 000 (40%): (2011 – R552 000 (40%))
Tax-free Interest Income Increased:
Below the age of 65: R22 800 (2011 – R22 300)
Aged 65 and over: R33 000 (2011 – R32 000)