The Finance Minister of South Africa presented the Budget for 2017-18 to the Parliament on 22 February 2017. The main tax proposals of the Budget are given below.

The 2017/18 tax year sees the introduction of a new top marginal income tax bracket for individuals and partial relief for bracket creep which will raise an additional R16.5 billion. R6.8bn will be collected through a higher dividend withholding tax rate. Increases in fuel taxes and alcohol and tobacco excise duties will together increase revenue by R5.1bn.  As soon as the necessary legislation is approved, government will implement a tax on sugary beverages. The rate will be 2.1c per gram for sugar content above 4g per 100 ml. A revised Carbon Tax Bill will be published for public consultation and tabling in Parliament by mid-2017.

The general fuel levy will increase by 30c/litre on April 5 2017. This will push the general fuel levy up to R3.15/litre of petrol and to R3.00/litre of diesel. The road accident levy will increase by 9c/litre of petrol and diesel on April 5 2017. The first R900 000 of the value of property acquired from March 1 2017 will be taxed at zero percent. Before March 1 2017 the first R750 000 of the value of property was taxed at zero percent.

With regard to combating tax avoidance, government intends to sign the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, which will assist in the updating of treaties and will reduce the scope for aggressive tax avoidance activities” by multinational enterprises (MNEs).

The automatic exchange of information between the South African Revenue Service (SARS) and tax authorities in other jurisdictions will come into operation in September this year. MNEs will be required to file further information with SARS on cross-border activities from the end of the year.

The changes of the Budget will apply from 1 March 2017.