Tag: Budget 2018

Somewhat ironically, each new year launches into the same old news cycle: the WEF meetings at Davos, the State of the Nation (Sona) speech, presentation of the national Budget to Parliament. Those a bit longer in the tooth may feel that it’s all over-hyped – 'sound and fury, signifying nothing' – because invariably these events don’t become watershed moments, just brief intermissions that change little, if anything.

The VAT hike as part of the 2018 Budget Speech poses the risk of eroding the spending power of poor and lower-income households, exacerbating poverty and increasing inequality. VAT is a regressive tax - Value added tax (VAT) – charged on most goods and services at a rate of 14% – is levied irrespective of how much somebody earns, making it a regressive tax.

While the necessary legislative provisions to give effect to the proposed increase are still to be adopted by Parliament, one can accept that the Minister's proposal to increase VAT from 1 April 2018 will be implemented. A number of important issues need to be considered to ensure a seamless transition.

South Africa has specific anti-tax avoidance legislation aimed at South African owned foreign companies. This so-called controlled foreign company tax legislation in essence aim to tax the notional taxable income of a foreign company in the hands of its South African shareholders.

What will the 2018 Budget Speech mean for your business? Our experts share their insights. Join the conversation on Twitter #SABudget2018.

Personal income tax - When looking at the changes to personal income tax in isolation (i.e. ignoring the increase in the VAT rate and the usual increases in “sin taxes”, the news in the budget was probably as good as could have been expected.

PwC’s tax comments on the 2018 Budget Review: Indirect Tax.