130228 budget presentation february 2013

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A summary of the South Africa Budget Speech 2013-2014 by Minister Pravin Gordhan, the highlights and how it's going to affect you.

A summary of the South Africa Budget Speech 2013-2014 by Minister Pravin Gordhan, the highlights and how it's going to affect you.

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  • 1. By Kevin Yeh, CFP® Daberistic Financial ServicesCreating Financial Security, Prosperity and Wealth www.daberistic.com info@daberistic.com Daberistic
  • 2. Contents• Uncle Pravin’s speech highlights• Uncle Pravin wants your money – Individual Taxes• Uncle Pravin encourage you to start small businesses• What Uncle Pravin wants you to do Daberistic
  • 3. Daberistic Financial Services• Authorised financial services provider, FSP # 25477• “One-stop shop” offering – Life insurance – Medical aid – Investments – Car and household insurance – Business insurance Daberistic
  • 4. Our product providers Daberistic
  • 5. Uncle PravinCourtesy: fin24 Daberistic
  • 6. What do people say about our uncle’s speech Gordhan did his best Daberistic
  • 7. Pravin’s budget highlight1. In line with the National Development Plan2. R7bn tax relief for individual tax payers3. Budget deficit at 4.6% in 2013/144. Economic growth 2.7% in 20135. Inflation stable at 5.7% in 20136. Net loan debt 38.6% of GDP in 2013/14 Daberistic
  • 8. Pravin’s budget highlight Budget 2013/14 (in R bn)1,2001,000 800 600 1149.4 985.7 400 200 0 Revenue Spending Daberistic
  • 9. Pravin’s budget highlight8. Personal tax threshold R67,111 (R63,556)9. Sin taxes go up between 5% and 10%10.Fuel levy up 23c11.Levy on plastic shopping bags up to 6c12.Social grants up by 4% ~ 5%13.Medical aid credit R242 first two/R162 additional14.Consider making transfer to preservation fund compulsory when changing employer Daberistic
  • 10. Pravin’s budget highlight15.Youth employment incentive to be tabled16.Upgrade infrastructure: R827bn17.Moderate employment growth18.Spending cuts of R10.4bn next 3 years19.Tax relief for small businesses20.Special economic zone – 15% corporate tax21.Review of mining tax22.Encourage investments and trades with Africa Daberistic
  • 11. Pravin’s budget highlight15.Youth employment incentive to be tabled16.Upgrade infrastructure: R827bn17.Moderate employment growth18.Spending cuts of R10.4bn next 3 years19.Tax relief for small businesses20.Special economic zone – 15% corporate tax21.Review of mining tax22.Encourage investments and trades with Africa Daberistic
  • 12. Individual Taxes Daberistic
  • 13. Individual taxes – younger than 65 Daberistic
  • 14. Personal income tax rate Taxable Income (R) Rates of taxR0 – R165,600 18%R165,601 – R258,750 25%R258,751 – R358,110 30%R358,111 – R500,940 35%R500,941 – R638,600 38%R638,601 + 40% Daberistic
  • 15. Individual taxesRebatesPrimary (Under age 65) R12,080Secondary (65 – 75) R6,750Tertiary (age 75 and over) R2,250 Tax threshold Below age 65 R67,111 Age 65 – 75 R104,611 Age 75 and over R117,111 Daberistic
  • 16. Individual taxes• Interest and dividend income – Annual exemption on interest R23,800 (age <65) and R34,500 (age 65+)• Medical aid tax credit – R242 (R230) for first 2 – R162 (R154) for each additional Daberistic
  • 17. Individual taxes• Retirement fund lump sum withdrawal benefits – no change Taxable income (R) Rate of Tax 0 – 22,500 0% 22,501 – 600,000 18% 600,001 – 900,000 27% 900,001 + 36% Daberistic
  • 18. Individual taxes• Retirement fund lump sum benefits or severance benefits – no change Taxable income (R) Rate of Tax 0 – 315,000 0% 315,001 – 630,000 18% 630,001 – 945,000 27% 945,001 + 36% Daberistic
  • 19. Retirement fund reforms• From March 2014: – Employer contributions as taxable fringe benefits in the hands of the employee – Individuals allowed 27.5% of the higher of taxable income or employment income as deduction, for contributions to pension, provident and retirement annuity funds – Maximum annual deduction R350,000 – Tax-preferred savings and investment accounts in 2015 Daberistic
  • 20. Retirement fund reforms• From March 2014: – Retirement funds must identify appropriate preservation funds for exiting members – Must guide members of converting savings into a regular income after retirement – More competition promoted to sell living annuities – Tax treatment of pension, provident and retirement annuity funds simplified and harmonised Daberistic
  • 21. Retirement fund reforms• From March 2014: – Vested benefits protected Daberistic
  • 22. Small business tax relief• Turnover threshold R20m (R14m) Taxable income (R) Rate of tax 0 – 67,111 0% 67,112 – 365,000 7% 365,000 – 550,000 21% 550,000 + 28% Daberistic
  • 23. Where the budget money comes from Source 7% 5% Personal Income Tax 34% Excise Duties Corporate Tax 27% Customs VAT Fuel 3% Other 5% 19% Daberistic
  • 24. What does Uncle Pravin want you to do• Pay your dues on time• Preserve your retirement savings• Save money• Start businesses to create jobs and grow the economy Daberistic