The budget document highlights tax changes and proposals for individuals in South Africa. Key points include: - Personal income tax relief of R6.5 billion for individuals. - Increases in taxes on petrol, diesel, cigarettes, alcohol, and other items. - Tax thresholds and exemptions are adjusted for individuals under and over age 65. - Proposed tax relief amounts and percentages are outlined for different income levels. - Retirement fund tax rates and exemptions are adjusted. - Other proposals include changes to medical deductions, provisional tax exemptions, and estate duty.

1. Welcome

2. BUDGET 2010:
IENS NUSQUAM!

3. BUDGET HIGHLIGHTS
• Personal income tax relief for individuals amounting to
R6.5 billion.
• Taxes on petrol and diesel to increase by 25.5c (Petrol =
R2.48) (Diesel R2.30.20) per litre.
• A packet of 20 cigarettes will cost 1.24c more (R8.94).
• A 750 ml bottle of fortified wine will cost 12c more
(R4.03).
• A 750 ml bottle of natural wine will cost 12c
more(R2.14).
• A 340 ml can of beer to cost 6.5c more (85.5c) while a
bottle of spirits will cost R2.22 more (R27,27).

4. PROPOSALS FOR INDIVIDUALS
• Tax relief to individuals amounting to R6.5 billion
countering inflation (really???) as well as providing real
relief (at certain levels).
– 2009 – R13 Billion
– 2008 – R7, 2 Billion.
– 2007 – R 8,4 Billion.
– 2006 – R 13,5 Billion
– 2005 – R 6,8 Billion
• Individuals younger than 65 years of age earning a total
amount of
– R60,000 will pay an amount equal to an average rate of 0.9% of earnings
and save R504;
– R80,000 will pay an amount equal to an average rate of 5.175% of
earnings and save R504;

5. PROPOSALS FOR INDIVIDUALS(cont.)
– R200 000 will pay an amount equal to an average rate of 14,97%
of earnings and save R1,064;
– R250 000 will pay an amount equal to an average rate of 17.6% of
earnings and save R1,614;
– R750 000 will pay an amount equal to an average rate of 30,62%
of the earnings and save R3,534.
• The tax threshold for individuals younger than 65 will be
R57 000 and for individuals 65 or older R88 528.

6. PROPOSALS FOR INDIVIDUALS(cont.)
• Taxpayers with taxable income below R150,000 will
receive 24.6% of the relief; those with an annual taxable
income between R150,001 and R250,000=28.8%; those
with an annual taxable income between R250,001 and
R500 000=26.2%; and those with an annual taxable
income above R500 000=20.4%
• Taxpayers with taxable income below R250,000 account
for 30% of personal income tax revenue. Those with an
annual taxable income between R250,001 and
R500,000=26%; and those with an annual taxable income
above R500 000=44%.

7. PROPOSALS FOR INDIVIDUALS(cont.)
• Retirement fund lump sum withdrawal benefits
• Taxable Income (R) Rate of Tax (R)
• 0 – 22,500 0% of taxable income
• 22,501 – 600,000 18% of taxable income above R22,500
• 600,001 – 900,000 R103,950 + 27% of the amount above R600,000
• 900,001 and above R184,950 + 36% of the amount above R900,000
• The taxable income from a retirement fund lump sum withdrawal benefit
(lump sum from a pension, pension preservation, provident, provident
preservation or retirement annuity fund on withdrawal) is determined
after deducting a lifetime exemption of R22,500. The tax payable is
determined by applying the rate table to the aggregate of the taxable
portions of all retirement fund lump sum withdrawal benefits accrued
during the current and previous years of assessment and deducting tax
payable according to the current tax table on the aggregate of those
lump sums accrued during previous years of assessment.

8. PROPOSALS FOR INDIVIDUALS(cont.)
• Retirement fund lump sum benefits
• Taxable Income (R) Rate of Tax (R)
• 0 – 300,000 0% of taxable income
• 300,001 – 600,000 18% of taxable income above R300,000
• 600,000 – 900,000 R54,000+27% of the amount above R600,000
• 900,001 and above R135,000+36% of the amount above R900,000
• The taxable income from a retirement fund lump sum benefit (lump sum
from a pension, pension preservation, provident, provident preservation
or retirement annuity fund on death, retirement or termination of
employment due to redundancy or termination of employer’s trade) is
determined after deducting a lifetime exemption of R300,000. The tax
payable is determined by applying the rate table to the aggregate of the
taxable portions of all retirement fund lump sum benefits and retirement
fund lump sum withdrawal benefits accrued during the current and
previous years of assessment and deducting tax payable according to
the current tax table on the aggregate of those lump sums accrued
during previous years of assessment.

9. Taxable income % Reduction
R60,000 48.28%
R100,000 6.11%
R200,000 3.43%
R300,000 3.47%
R400,000 2.46%
R500,000 2.24%
R750,000 1.09%
R1000,000 1,06%
PROPOSALS FOR INDIVIDUALS(cont.)

10. THRESHHOLDS
Year Below 65 Above 65
2011 R57,000 R88,528
2010 R54,200 R84,200
2009 R46,000 R74,000
2008 R43,000 R69,000
2007 R40,000 R65,000
2006 R35,000 R60,000
2005 R32,222 R50,000
2004 R27,000 R42,640
2003 R27,000 R42,640
2002 R23,000 R39,154

11. EXEMPTIONS - REVENUE
Year Below 65 Above 65
2011 R22,300 R32,000
2010 R21,000 R30,000
2009 R19,000 R27,500
2008 R18,000 R26,000
2007 R16,500 R24,500
2006 R15,000 R22,000
2005 R11,000 R16,000
2004 R10,000 R15,000
2003 R6,000 R10,000
2002 R4,000 R5,000

12. EXEMPTIONS – CAPITAL GAINS
Year Reversal
2011 R17,500
2010 R17,500
2009 R16,000
2008 R15,000
2007 R12,500
2006 R10,000
2005 R10,000
2004 R10,000
2003 R10,000
2002 R10,000

13. FURTHER PROPOSALS
• SITE system to be discontinued.
• Provisional tax exemptions:
– Individuals below the age of 65 who do not carry on a business
and whose taxable income
• will not exceed the tax threshold for the tax year; or
• from interest, dividends and rental will be R20 000 or less for the
tax year.
– Individuals age 65 and older if their annual taxable income
• consists exclusively of remuneration, interest, dividends or rent
from the lease of fixed property and is R120 000 or less for the tax
year.
• Exchange control reforms proposed.*
• Congestion, pollution and landfill taxes considered
• Limited voluntary disclosure option for taxpayers in
default.*

14. FURTHER PROPOSALS (cont.)
• Niggles remain for proposed dividend tax.*
• National Health Insurance scheme delayed for about five
years.*
• Gambling winnings being exempt from personal income
tax to be reviewed.*
• Wage subsidy for young people.*
• The company car fringe benefit value is to be increased.
• Deferred compensation and employer-provided group life
insurance will be taxed as fringe benefits.
• Relief is provided for the unusual circumstances where a
country changes its entire unit of currency.*

15. FURTHER PROPOSALS (cont.)
• Medical expenses exempt/deductible portion is R640
(R625) for each of the first 2 beneficiaries, and R410
(R380(R345) for each additional beneficiary.
• The R30 000 exemption for termination of services to be
merged into the retirement fund lump sum and taxed by
applying the tax table for retirement fund lump sum
benefits.
• Anti avoidance legislation*
• Headquarter Companies
– Relief from exchange control and taxation will be considered for
various types of headquarter companies located in South Africa.

16. VOLUNTARY DISCLOSURE INITIATIVE
• In order for taxpayers to disclose their non-compliance and
regularise their tax affairs a voluntary disclosure initiative
will be implemented.
• The programme is to be effective during a window period
from 1 November 2010 until 31 October 2011.
• The full amount of tax remains due.
• Relief with regard to interest and penalties will apply.
• Relief is to be granted if
– the disclosure is complete.
– SARS was not aware of the default.
– a penalty or additional tax would have been imposed had SARS
discovered the default in the normal course of business.

17. ANTI AVOIDANCE LEGISLATION
• It is proposed that legislative amendments be introduced to
address a number of aggressive tax schemes, for example–
– interest cost allocation for financial institutions.
– offshore protected cell companies.
– schemes channeling deductible amounts to residents in the form
of tax free foreign dividends.
– restricting the interest exemption for non-residents investing in
financial instruments other than South African bonds, unit trusts
or publicly available interest bearing instruments.
•

18. • The death of death Duties.
ESTATE DUTY

19. BUDGET 2011
IENS TERGIVERSATIO