On 21 February 2018, South Africa’s Minister of Finance, Malusi Gigaba, delivered the Budget for the year of 2018.
The budget includes the following tax proposals:
- VAT rate to increase from 14% to 15%. This change is effective from 1 April 2018.
- Ad-valorem excise duty rate on luxury goods to increase from 7% to 9%. Effective 1 April 2018, the maximum ad valorem excise duty for motor vehicles will increase from 25% to 30%.
- From March 1 a higher estate duty tax rate of 25% for estates greater than R30mn will be introduced. In the past the duty was levied on the value of an estate at a flat rate of 20%.
- Alcohol & tobacco excise duties to increase between 6 & 10%.
- Carbon Tax Bill expected to be enacted before the end of 2018. Tax to be implemented from 1 January 2019.
- Vehicle emissions tax will be increased to R110 for every gram above 120 gCO2/km for passenger vehicles and R150 for every gram above 175 gCO2/km for double cab vehicles, effective 1 April 2018.
- Increases in fuel levies and sin taxes (an estimated R2.5 billion of additional tax revenue)
- A below-inflation increase in the individual (personal) income tax rebates and brackets, with greater relief for those in the lower income tax brackets
The corporate income tax rate on companies and trusts currently 28% and 45% respectively remains unchanged.
