{"id":153155,"date":"2017-01-30T14:48:06","date_gmt":"2017-01-30T12:48:06","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=153155"},"modified":"2017-01-30T17:05:25","modified_gmt":"2017-01-30T15:05:25","slug":"this-is-how-much-more-tax-you-could-be-paying-this-year","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/153155\/this-is-how-much-more-tax-you-could-be-paying-this-year\/","title":{"rendered":"This is how much more tax you could be paying this year"},"content":{"rendered":"

In his mid-term budget speech last October, Finance Minister Pravin Gordhan said that the country would likely face tax increases of R13 billion in 2017.<\/p>\n

And according to Patricia Williams, tax partner at Bowmans, the country’s middle to high-income earners will be the hardest hit by\u00a0tax increases when Gordhan tables the national budget next month.<\/span><\/p>\n

This follows the Davis Tax Committee’s second and final 2016 reports which recommended\u00a0raising the lower marginal tax rates and the top tax rates, while reducing those in the middle of the schedule.<\/p>\n

\u201cThe tax tables are routinely adjusted on an annual basis, to minimize the effect of bracket creep (also called fiscal drag), where the inflation-related increase received by a taxpayer pushes her or him into a higher tax bracket, resulting in higher taxes,” Williams said.<\/p>\n

\u201cOne can therefore anticipate that the tax tables will not be adjusted fully for the bracket creep effect in 2017, and that we will most likely see the top marginal tax rates increase from 41% to 42%, at a minimum<\/strong>. This may potentially be accompanied by an increase in the lower marginal tax rates with some relief in the ‘middle’ rates,\u201d she noted.<\/p>\n

These increases appear to be in line with both the current African Tax Outlook report and previous annual changes and forecasts.<\/p>\n

The tables below show how much more income tax you could be paying after the budget announcement in February, based on the official 2016\/2017 tax brackets and rates as well as the effects of a possible\u00a0increase of 1% (the minimum reported increase) to the current tax rate.<\/p>\n

Increases to the lower tax brackets were not included, as analysts expect that they are unlikely to be affected by the budget announcement on 22 February.<\/p>\n

\n

Upper Tax Bracket minimum projected changes<\/strong><\/h3>\n

R206,964 + 41% of taxable income above R701,300 according to\u00a02016\/2017 tax rates<\/em><\/p>\n

\n
\n\n\n\n\n\n\n\n
Yearly\u00a0Income<\/th>\n2016\/2017 tax rate (41%)<\/th>\nEstimated 2017\/2018 tax rate (42%)<\/th>\nEstimated Difference<\/th>\n<\/tr>\n
R701 301<\/td>\nR287 533<\/td>\nR294 546<\/td>\nR7 013<\/td>\n<\/tr>\n
R850 000<\/td>\nR348 500<\/td>\nR357 000<\/td>\nR8 500<\/td>\n<\/tr>\n
R1 000 000<\/td>\nR410 000<\/td>\nR420 000<\/td>\nR10 000<\/td>\n<\/tr>\n
R1 250 000<\/td>\nR512 500<\/td>\nR525 000<\/td>\nR12 500<\/td>\n<\/tr>\n
R1 500 000<\/td>\nR615 000<\/td>\nR630 000<\/td>\n\u00a0R15 000<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n
\n

Second upper tax bracket minimum projected changes<\/strong><\/p>\n

R147,996 + 39% of taxable income above R550,100\u00a0according to\u00a02016\/2017 tax rates<\/em><\/p>\n

\n
\n\n\n\n\n\n\n
Yearly\u00a0Income<\/th>\n2016\/2017 tax rate \u00a0(39%)<\/th>\nEstimated\u00a02017\/2018 tax rate (40%)<\/th>\nEstimated Difference<\/th>\n<\/tr>\n
R550 101<\/td>\n\u00a0R214 539<\/td>\n\u00a0R220 040<\/td>\n\u00a0R5 501<\/td>\n<\/tr>\n
R600 000<\/td>\n\u00a0R234 000<\/td>\n\u00a0R240 000<\/td>\n\u00a0R6 000<\/td>\n<\/tr>\n
R650 000<\/td>\n\u00a0R253 500<\/td>\n\u00a0R260 000<\/td>\n\u00a0R6 500<\/td>\n<\/tr>\n
R701 300<\/td>\nR273 507<\/td>\nR280 520<\/td>\n\u00a0R7 013<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n
\n

Third upper tax bracket minimum projected changes<\/strong><\/p>\n

R96,264 + 36% of taxable income above R406,400\u00a0according to\u00a02016\/2017 tax rates<\/em><\/p>\n

\n
\n\n\n\n\n\n\n
Yearly Income<\/th>\n2016\/2017 tax rate (36%)<\/th>\nEstimated 2017\/2018 tax rate (37%)<\/th>\nEstimated Difference<\/th>\n<\/tr>\n
R406 401<\/td>\n\u00a0R146 304<\/td>\n\u00a0R150 368<\/td>\n\u00a0R4 063<\/td>\n<\/tr>\n
R425 000<\/td>\nR153 000<\/td>\n\u00a0R157 250<\/td>\n\u00a0R4 250<\/td>\n<\/tr>\n
R450 000<\/td>\n\u00a0R162 000<\/td>\n\u00a0R166 500<\/td>\n\u00a0R4 500<\/td>\n<\/tr>\n
R500 000<\/td>\n\u00a0R180\u00a0000<\/td>\n\u00a0R185 000<\/td>\n\u00a0R5 000<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

VAT changes may still hit lower income earners<\/strong><\/p>\n

While all indications are that the planned tax increases should not impact low income earners, the VAT rate could see a long rumoured increase, said Williams.<\/p>\n

The news isn’t all bad, however, as the VAT increases would be combined with certain specific exemptions or zero-ratings to offset the negative impact.<\/p>\n

We could see the introduction of a third “luxury” VAT rating category (in addition to the 0% and 14% categories) of around 19%. however.<\/p>\n

\n

Read:\u00a0South Africans who get tipped at work may be in for a nasty tax shock next month<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Finance minister Pravin Gordhan has the unenviable task of drawing in R13 billion more in taxes in 2017, and experts predict that pushing higher income tax on South Africa’s wealthiest people is the way he is likely to go.<\/p>\n","protected":false},"author":10,"featured_media":27055,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[11709,26],"class_list":["post-153155","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-bowmans","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/153155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=153155"}],"version-history":[{"count":22,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/153155\/revisions"}],"predecessor-version":[{"id":153851,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/153155\/revisions\/153851"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/27055"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=153155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=153155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=153155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}