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BUDGET 2010

Introduction

Once more, income tax rates have been adjusted in favour of the lower to medium income brackets.

The following table illustrates the major changes that are proposed in the budget:

Personal income tax rate and bracket adjustments, 2009/10 and 2010/11

2009/2010		2010/2011
Taxable income (R) Rates of tax		Taxable income (R) Rates of tax
0-132 000	18% of each R1	0-140 000	18% of each R1
132 001-210 000	R 23760+25% of the amount above R132 000	140 001-221 000	R 25200+25% of the amount above R140 000
210 001-290 000	R 43260+ 30% of the amount above R210 000	221 001-305 000	R 45450+ 30% of the amount above R221 000
290 001-410 000	R 67260 + 35% of the amount above R290 000	305 001-431 000	R 70650 + 35% of the amount above R305 000
410 001-525 000	R 109260+ 38% of the amount above R410 000	431 001-552 000	R 114750+ 38% of the amount above R431 000
525 001 and above	R 152960+ 40% of the amount above R525 000	552 001 and above	R 160730+ 40% of the amount above R552 000
Rebates		Rebates
Primary	R9 756	Primary	R10 260
Secondary	R5 400	Secondary	R5 675

Tax threshold
Below age 65	R54 200	Below age 65	R57 000
Age 65 and over	R84 200	Age 65 and over	R88 528
Interest Exemption
Below age 65	R21 000	Below age 65	R22 300
Age 65 and over	R30 000	Age 65 and over	R32 000

Other proposals and possibilities

· Discontinuance of the SITE system with effect from 1 March 2011.

· Medical scheme capped amounts up from R625 to R670 for the first two beneficiaries and from R380 to R410 for each additional beneficiaries

· The R 30 000 retrenchment income tax exemption is to be abolished. Income from such packages will be treated the same as retirement lump sums.

· The deemed monthly taxable values of company vehicles is to be increased.

· Hitherto untaxed group life benefits are to be treated as taxable fringe benefits.

· With effect from 1 September 2010, new passenger vehicles will be the subject of a CO2 emission tax.

· With effect from 7 April 2010, the price of petrol and diesel will increase by 25.5 c per litre

· Between 1 November 2010 and 31 October 2011, taxpayers, who disclose their tax indiscretions, will not be subjected to interest on such non-disclosures provided that a complete disclosure is made, SARS was not aware of the default and a penalty or additional tax would have been imposed had SARS discovered the default.

· Last year, it was announced that residential property owning companies could be liquidated, under certain conditions, without incurring additional tax liabilities. A three year window of opportunity was proposed. Proposals to modify and make this window more flexible are to be announced later.