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Tax Change

Money is tight and the Government are looking to limit spending and increase income.

Other than the usual increases to sins tax Government decided to avoid introducing many new taxes or messing with VAT. There was one slightly different choice in regard to personal tax this year that may hit your pocket.

In an effort to bring in an additional R15 billion more than usual, Finance Minister Enoch Godongwana outlined “new” tax brackets for personal income taxpayers in his annual Budget speech.

Now, usually, there is a small annual increase in these tax brackets to allow for inflation. So, the tax brackets normally creep up a little bit each year. This normally means that people stay in the same bracket even if they earn slightly more due to increases in salary.

The big change this year is that this is not going to happen.

What this will mean is that if employers offered staff increases to try offset inflation, then some workers will migrate from one tax bracket into a higher bracket and have to pay a little more tax.

The tax-free threshold for taxpayers under 65 years will remain at R95 750 per year.

You can check the chart below to see what those different tax brackets are and what the tax in each bracket is.