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<\/p>\nFinance minister Enoch Godongwana has outlined the new tax brackets for personal income taxpayers in his Budget speech 2023 on Wednesday (22 February).<\/p>\n
The personal income tax brackets will be fully adjusted for expected inflation for the year – 4.9% – which should provide some relief to South African taxpayers.<\/p>\n
Increasing brackets by a value less than inflation is often used as an easy way to draw in revenue, as many taxpayers are pushed into higher brackets and subsequently end up paying more tax.<\/p>\n
For the 2023\/24 financial year, however, this is not the case. The adjustment by inflation will also increase the tax-free threshold from R91,250 to R95,750, the minister noted.<\/p>\n
Medical tax credits will also be increased by inflation, to R364 per month for the first two members and to R246 per month for additional members.<\/p>\n
The tables below outline the tax brackets for 2023:<\/p>\n
<\/p>\n
According to Godongwana, Tax revenue collections for 2022\/23 are expected to total R1.69 trillion. This exceeds the 2022 Budget estimate by R93.7 billion, and the 2022 MTBPS estimate by R10.3 billion.<\/p>\n
Over the medium-term, revenue projections are R6 billion higher than the estimates of the 2022 MTBPS.<\/p>\n
As a result, there are no major tax proposals in the budget, he said.<\/p>\n
“The improvement in revenue is due to higher collection in corporate and personal income taxes, and in customs duties. This partially offset the lower value-added tax estimates.<\/p>\n
“Our country is reaping the benefits of a more efficient and effective tax administration, that is building trust to increase voluntary compliance and boost revenue collections,” the minister said.<\/p>\n