More power
- Income tax for individuals is reduced by R8.4 billion.
* The tax threshold increases to an annual income of R43 000, which means that if you earn less than R43 000 a year, you will not pay income tax.
* If you earn R60 000 a year, you now pay tax at an average rate of five percent of your earnings and save R540 in taxes.
* If you earn R150 000 a year, you pay tax at an average rate of 15 percent of your earnings and save R1 415 in taxes.
* If you earn R450 000 a year, you pay tax at an average rate of 27 percent of your earnings and save R6 415 in taxes.
- Your retirement fund will no longer pay tax on the interest and net rental income it earns on your savings from March 1, 2007.
- The annual donations tax exemption has been doubled from R50 000 to R100 000.
- The exemption threshold for estate duty tax increases from R2.5 million to R3.5 million. This means your estate will not pay duty on the first R3.5 million of the net assets in your estate.
- The threshold for the exemption of capital gains tax (CGT) on death has been doubled from R60 000 to R120 000. This means when you die, R120 000 of your gains will be exempt from CGT.
- The annual deduction for donations to public benefit organisations increases to 10 percent of taxable income from five percent last year.
- The portion of your medical scheme contribution subsidy that is exempt from tax increases from R500 to R530 each for the principal member and the first dependant. For each additional dependant, the amount increases from R300 to R320.
- Ad valorem tax has been abolished on air-conditioners in cars, domestic dish-washing machines, camera lenses, sunglasses, binoculars, telescopes, instant print cameras, other photographic cameras, flashlights and flashbulbs, cinematographic cameras, cinematographic projectors, slide projectors and image projectors. Ad valorem tax is a tax based on the assessed value of real estate or personal property, and its abolition on these goods should result in you paying less for them.
- The threshold for tax-free interest and foreign dividend income increases from R16 500 to R18 000 if you are younger than 65, and from R24 500 to R26 000 if you are older than 65. The part of this exemption that applies to foreign dividends and interest has been increased to R3 000 a year (up from R2 500).
- You will not pay tax on capital gains or losses up to R15 000 (up from R12 500) each year.
- The lump-sum benefits for deaths caused by occupational injury will be exempt from tax up to R300 000.
- The social old-age, disability and care dependency grants increase by R50 to R870 a month. The foster care grant increases by R30 to R620, and the child support grant increases by R10 to R200.
Putting on the brakes
- Sin taxes have again been increased. With immediate effect, you will pay:
*Five cents more for a 340ml can of malt beer;
*Thirteen cents more for a 750ml bottle of wine;
*R1.88 more for a 750ml bottle of spirits; and
*Sixty cents more for a packet of 20 cigarettes.
- Effective from April 4, 2007, the fuel levy increases by five cents for petrol and diesel to R1.21 a litre and R1.05 a litre. The Road Accident Fund levy will also increase by five cents to 41.5c a litre for petrol and diesel.
Idling
The transfer duty tax on properties remains unchanged from last year. Individuals do not pay transfer duty on properties worth R500 000 and less. For properties between R500 000 and R1 million, you pay five percent on the value above R500 000. For properties worth more than R1 million, you pay R25 000 plus eight percent on the value above R1 million.