Earlier this year, the Minister of Finance, Nhlanhla Nene (''Finance Minister'') announced in the budget speech that after 20 years of consistency, there will be a 1 point increase in the percentage for personal income tax. This is now in black and white in the Rates and Monetary Amounts and Amendment of Revenue Laws Act, which was promulgated on 17 November 2015.
The taxpayers in the lowest income bracket (individuals earning less than R181 900) are the only ones who were spared from the tax increases, pushing the highest tax rate to 41% for individuals earning over R701 301.
It is also worth noting that properties with a value that does not exceed R750 000 are exempt from the imposition of transfer duty as from 1 March 2015. Transfer duty will now be imposed at the rate of 11 per cent on properties that exceed R2.25 million.
According to the Finance Minister, the increase on personal income tax is to help Government raise revenue by limiting the "erosion of the corporate tax base". Furthermore, National Treasury (''Treasury'') stated that ''the additional revenue would help to close the gap in the public finances over the medium term.''
At the time that the Finance Minister and Treasury uttered these words to the public, they would not have anticipated that Government would then commit to funding/closing the gap created by the decision taken by the President of South Africa in an attempt to end the #FEESMUSTFAIL protests.
Government has yet to inform the public where the money to fund university fees will come from but it is safe to assume that taxpayers will be contributing to Government's commitment. The question on everyone's mind now is whether the revenue collected will be sufficient to fund university fees, Eskom and other state entities that require bail-outs.
With that uncomfortable thought at the back of my minds, one cannot help but wonder if the Finance Minister will not announce another increase, this time, pushing the percentages of corporate income tax and perhaps (but hopefully not) VAT to its breaking point.