2018 Budget Speech Highlights and 2018/2019 PKF Tax Guide
21 Feb 2018
Finance Minister Malusi Gigaba delivered his maiden 2018 budget speech on 21 February 2018. The highlights of the tax related budget proposals announced by the Minister are as follows:
- As from 1 April 2018, the VAT rate increases from 14% to 15%.
- As from 1 March 2018, the Donations Tax rate increases from 20% to 25% in respect of donations in excess of R30 million.
- As from 1 March 2018, the Estate Duty rate increases from 20% to 25% in respect of the value of dutiable estate in excess of R30 million.
- As from 1 April 2018, tax on sugary beverages will be levied at 2.1 cents per gram exceeding 4 grams per 100ml.
- The Income Tax and VAT legislation will be amended to clarify the tax treatment of cryptocurrency transactions.
- Consideration is being given to increasing the official interest rate to align it closer to the prime lending rate.
- Medical tax credit increases are below inflation in order to assist with funding the National Health Insurance Programme over the next few years.
- The draft legislation in 2017 provided for a reclassification of distributions from foreign trusts to resident beneficiaries to be taxed as income. These proposals were postponed and will be reconsidered in the current year.
- SARS will release a discussion paper on the potential use of electronic fiscal devices, know as electronic cash registers, to assist revenue administration by monitoring business transactions.