ANALYSIS | Hereâs how your taxes could change after next weekâs Budget 2021 Feb 19, 2021, 05:10 PM
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The 2021 Budget speech will require a careful balancing act from finance minister Tito Mboweni.
Some taxes may be revised, but he is likely to prioritise economic growth rather than just pushing up tax rates.
Personal income tax rates probably won t increase, they ll just miss out on the usual relief.
A VAT increase could be announced – for implementation in future years rather than immediately.
Here is how VAT specialist Charles de Wet believes taxes could change thanks to the new national budget.
Finance minister Tito Mboweni is due to deliver his 2021 budget speech on Wednesday.
Deputy Director-General - Budget Office it-online.co.za - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from it-online.co.za Daily Mail and Mail on Sunday newspapers.
Tax hikes for South Africa this month – do we have any more room?
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In 2020 there was a glimmer of hope as we saw no major tax increases to personal income tax (PIT) and no changes to the corporate or value-added tax (VAT) rate, says Carla Rossouw, tax lead at Allan Gray.
Instead, the focus shifted to reducing government spending, which included reducing the public wage bill by roughly R160 billion over three years.
“It appeared as if government conceded that taxing an already-concentrated and shrinking tax base would not deliver superior revenue income.
“The success of the 2020 budget was therefore solely reliant on the assumption that the wage bill could be reduced. But little did we know that a pandemic was approaching, with devastating consequences for an already-fragile economy,” Rossouw said.
Finance Minister Tito Mboweni should direct more funds to SARS so that it can improve its capabilities in ensuring efficient tax collections, say several industry experts.
The National Treasury has indicated a measure of willingness to fund a budget shortfall in the event that the government loses the court case in the public sector wage impasse.