The end of February means the end of summer and the financial year end for most South African companies. A busy time for all of us.
Minister Pravin Gordhan had his annual Budget Speech on Wednesday and while many economists, private corporations and politicians have welcomed certain aspects of Gordhan’s Budget Speech, others are sceptical.
Gordhan announced personal tax relief of R9.2 billion, more money for service delivery and social grants amongst others. He said the focus for the next five years will be on growth, development and jobs, which will be guided by the National Development Plan. But the bad news is fuel levies will rise and consumers will now pay more for cigarettes and alcohol.
Gordhan warned that while the country’s through the worst of the five-year recession, there are still risks ahead and he called on all South Africans to spend their money carefully because of the current economic situation.
For our clients, the entrepreneurs and business owners, there is little change and with an economy growing at only 2. 7 percent and a super high unemployment rate, one can only hope that Government’s National Development Plan is successful and make business easier in the years to come.
TOP 10 BUDGET SPEECH HIGHLIGHTS
- Personal income tax rates adjusted to compensate for the effects of inflation.
- Personal income tax relief amounts to 9.25 billion. 40% of the relief goes to South Africans earning below R250,000 per year.
- To align the treatment of company car fringe benefits, it is proposed that the actual retail market value only be used. It is also proposed to treat employees who bear costs of fuel & maintenance more equitably.
- It is proposed that the first R500,000 of retirement lump-sum is tax free, up from R315,000.
- National Health Insurance white papers will be tabled soon.
- Unemployment benefits proposed to be extended to 365 days.
- There is a clear strategy for youth development and employment – employment tax incentive, special economic zones, industrial incentives, support for agriculture
- The deemed rate per kilometre increased with 6 cents to R3,30/km.
- RSA subsistence values are now R335/day for meals & incidentals and R103 for incidentals only for travel inside the RSA.
- Medical tax credits are now R257 for the main members & 1st dependent and R172 for additional dependents.
TESTIMONIAL OF THE MONTH
Pieter Jacobs, CEO of the Arts and Culture Trust (ACT) :
There are so many factors that are considered when appointing an accounting firm. While cost was a major consideration we have reached a point where our accounting needs have outgrown the organisation’s accounting systems and processes. Not only was The Beancounter’s offering affordable, it is a one-stop-shop.
They have had a major impact on the Trust’s financial processes and procedures. The new electronic payment processing system they have implemented for us saves time and makes monitoring expenses a breeze. Their staff is professional and efficient. We couldn’t be happier about having them on board.
It’s an honour to serve you!
The Beancounter Team