BudgetSpeech2020 | “It would be foolhardy to increase taxes in such a difficult situation.”
Economists had anticipated either an increase in either of the taxes to make up for the R63bn shortfall in revenue, which is R10bn more than the shortfall announced by finance minister Tito Mboweni in October during the medium-term budget.
Mboweni said further tax relief meant that a teacher that earns R460,000 a year will see their taxes reduced by almost R3,400 a year, while those earning R265,000 a year will enjoy tax reductions of over R1,500 per year. Treasury was also is mulling tax proposals which could result in a reduction in corporate tax for the first time in over a decade, in a bid to boost economic growth.
However, government will closely watch and punish corporates that shift their profits to offshore destinations where taxes are lower. Treasury has also adjusted the threshold for transfer duties, meaning those who purchase property costing R1m or less will no longer have to pay transfer duty.
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