Tax relief for individuals, companies

first_img11 February 2009The proposed adjustments to personal income tax schedules will provide middle and lower income earners with R13.6-billion in tax relief, Finance Minister Trevor Manuel announced on Wednesday.Delivering his 2009/10 Budget speech to Parliament in Cape Town, Manuel said the adjustments to personal income tax would fully compensate South Africans for wage inflation.“The tax-free income threshold next year will be R54 200 for taxpayers below the age of 65 and R84  200 for those over 65,” he said.The tax-free threshold for the 2009/10 tax year will effectively increase from R46 000 for those below the age of 65, to R54 200.The revised estimate for tax collection for 2008/09 is R14.2-billion, which is less than the National Treasury planned in its 2008 Budget, he said.“For the year ahead, the main budget revenue estimate is R50-billion lower than we projected in February last year, against the background of slower growth, depressed trade and declining company profits.”Tax relief is also proposed for companies that invest in energy-efficient technology, with an additional allowance of 15 percent, on condition that there is proof of the resulting energy efficiencies as certified by the Energy Efficiency Agency.The minister, on the basis of a letter sent as part of the “Tips for Trevor” initiative, said he had also proposed a tax on companies using incandescent light bulbs, in an effort to get people to make use of energy saving compact fluorescent light bulbs.Taxes on petrol and diesel will increase by 40.5 and 41.5 cents per litre respectively, the minister announced, adding that road users would have to fork out an additional 23 cents and 24 cents per litre as well for fuel levies.“As road-users know, there is a substantial increase in spending on maintenance and construction under way, and we still face a heavy burden of road accidents and associated compensation claims.“These are costs that have to be covered, and so there will be increases of 17.5 cents in the road accident fund levy.”As per the 2009/10 Budget proposals, a packet of cigarettes will now cost 88 cents more, a 750ml bottle of natural wine will cost 10.5 cents more, a 340ml can of beer will cost 7 cents more, and a 750ml bottle of liquor such as whiskey will cost consumers R3.21 more, he announced.Manuel said that after discussions with both organised labour and the mining industry, and taking into account the impact of the economic slowdown on the mining industry, he proposed that the new mining royalties regime be deferred to 2010.“This provides a boost to the industry of about R1.8-billion [which would have been paid to government], which will assist in minimising job losses,” he said.Source: BuaNewslast_img