The 2015 Budget was presented by Minister Nhlanhla Nene before Parliament on 25 February 2015.    

From a fiscal point of view, the tax revenues for 2014/15 are expected to be ZAR14.7 billion below the 2014 Budget Review. Tax revenue as a percentage of GDP is expected to increase from 25.2% in 2014/15 to 25.8% in 2015/16.

To raise additional tax revenues, government proposes to increase the marginal personal income tax rates by 1% for all income tax brackets earning more than ZAR181 900 except the lowest, which will remain at 18%.

The increase in the marginal tax rate means that the effective rate for capital gains tax will increase for:

  • Individuals from 13.32% to 13.65%.
  • Trusts from 26.6% to 27.31%. 

In addition, there are a number of other proposed tax amendments that will be implemented.  We have highlighted some of the more pertinent proposals.

Personal Income Tax

Amendments to the Income Tax Act are proposed to provide for a move to an income tax self-assessment system.  It is uncertain as to how this will practically be implemented and monitored.

Share Incentive Schemes

Amendments will be made to section 8C of the Income Tax Act, including the taxation of directors and employees on vesting of equity instruments, the attribution of capital gains to beneficiaries, the income tax exemption of dividends and the employees’ tax provision related to the return of capital.  Any share incentive schemes that are implemented must therefore take cognisance of the revised provisions of section 8C.