Tax south Africa - Afrikan Heroes

South Africa Reduces Personal Income Tax Rates For Businesses And Individuals

February 27, 2020

South Africa’s Finance Minister Tito Mboweni has outlined the new tax brackets for personal income taxpayers in his Budget speech 2020 on Wednesday (26 February).

The minister said that to support growth, the government has proposed no major tax increases, but will instead offer some real personal income tax relief.

“This budget means that a teacher who earns on average R460,000 a year, will see their taxes reduced by nearly R3,400 a year,” said Mboweni.

“Hard-working taxpayers, who earn on average R265,000 a year, will see their income tax reduced by over R1,500 a year.

“Our income tax system is progressive, and the adjustments reflect this. Someone earning R10,000 a month will pay 10% less in tax. Someone earning R100,000 a month will pay about 1.5% less.”

The below table shows the tax rates from 1 March 2020 to 28 February 2021 for individuals and trusts in South Africa:

For comparison purposes, the below table shows the current tax rates for individuals and trusts in South Africa:

Mboweni said the proposal for no major increases was in line with the National Treasury’s aim of supporting growth.

The minister also said that the National Treasury will propose broadening the corporate income tax base. The additional revenue, he said, would be used to reduce the corporate tax in the near future to help businesses grow.

“Start-ups will ignite the economy. The tax system supports them in a number of ways, including the preferential small business tax regime, the VAT registration threshold and the turnover tax. We will review these to improve their effectiveness while at the same time reducing the scope of fraud and abuse,” he said.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com

South African Businesses Have Only 3 Weeks Left To File Their Taxes Electronically — or Face Penalties

November 15, 2019

Tax season for individual South African taxpayers who want to file at a branch closed on the 31 October 2019 — however, the electronic filing of taxes window is still open the South African Revenue Services (SARS) says.

In a statement on Thursday (14 November), the revenue collector said that filing a tax return on any of the digital platforms, namely, SARS MobiApp and eFiling platforms for non-provisional taxpayers will close on 4 December.

“SARS wishes to thank taxpayers for their submissions thus far and is encouraged by the 3,882,111 personal income tax returns filed on a digital platform as well as at a branch. These returns include submissions for both current and previous years,” it said.

“With digital filing still available, SARS is expecting an estimated 1,744,535 as of 8 November 2019 of the outstanding returns to still be submitted through these channels. SARS wants to remind taxpayers who are yet to file, that Tax season for 2019 has been designed to make filing a return simple and easy.”

Read also: South Africa To Introduce New Law That Will Help Startups Get 30% Of Contract Sum

Penalties

Should the extended electronic filing period not be used, administrative penalties will be levied for every month the return is outstanding, SARS said. It added that the non-filing of returns is a criminal offence.

South African taxpayers with outstanding returns of taxes can download the SARS MobiApp from the Playstore or Appstore and easily perform the following actions:

Register for SARS eFiling;
Submit a return;
Use the phone camera to upload supporting documents;
Retrieve their username or reset their password;
View their Notice of Assessment (ITA34), among other services;
Request a call-back to get the assistance of a SARS tax agent.

Image result for Tax to gdp Africa — Source: OECD

SARS said that taxpayers who meet all of the following criteria need not submit a return:

Their total employment income for the year before tax is not more than R500,000;
They only receive employment income from one employer for the full tax year;
They have no other form of income (e.g. car allowance, business income, and rental income, taxable interest or income from another job);
They don’t have any additional allowable tax related deductions to claim (e.g. medical expenses, retirement annuity contributions and travel expenses).

“Should taxpayers visit a branch with a personal income tax return filing query, they will be assisted with self-filing via the MobiApp or eFiling platforms,”it said.

“Taxpayers with smartphones will be required to download the SARS MobiApp before they can commence filing.”

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world