The 2018 Budget speech was delivered on 21 February. In contrast to 2017 there were quite a few items that directly impact the fiduciary industry.
Whilst a lot of attention has been focused on the increase in VAT, the major impact for fiduciary practitioners is the proposal to increase estate duty from 20% to 25% for estates worth R30 million and more. This is in line with the Davis Tax Committee recommendations. It is also proposed that any donations above R30 million in one tax year will be taxed at 25%, in an attempt to limit expected donations to avoid the higher estate duty rate. Both measures will be effective from 1 March 2018.
Other proposals in a nutshell:
- VAT increase to 15% from 1 April 2018
- A below-inflation increase in the personal income tax rebates and brackets, with greater relief for those in the lower income tax brackets
- Increases in the general fuel levy and alcohol and tobacco excise duties , as well as ad valorem excise duties for luxury goods
- An increase in the plastic bag levy, motor vehicle emissions tax and the levy on incandescent light bulbs, to promote eco-friendly choices
- A health promotion levy, which taxes sugary beverages from 1 April 2018
- An increase in the general fuel levy of 52c per litre on 4 April 2018.
For more details on the Budget, please refer to the Budget 2018 Tax Guide.