Taxpayers were favoured in this budget, but tax reform is on the cards to close down incentives and increase environmental taxes, writes Maya Fisher-French. BudgetSpeech2020
Taxpayers were favoured in this budget, but tax reform is on the cards to close down incentives and increase environmental taxes, writes Maya Fisher-FrenchFor the first time in three years, taxpayers will receive tax relief in the form of above-inflation adjustments to the tax tables.This will be offset by increases in carbon tax and an additional levy on plastic bags.
The decision to not increase taxes was in complete contrast to the 2019 medium term budget review statement, which warned of an extra R10 billion in tax revenue measures. According to the budget review, the tax burden in South Africa is now at a tax-to-GDP ratio of 26.3%, which places us among the highest taxed countries relative to our peers.Rather than increasing tax rates, the budget review stated that it would focus on improved tax collection from the SA Revenue Services.
According to National Treasury the system should make it easy for individuals and firms to comply and minimise distortions so that they do not base their decisions on tax. The budget review also included recommendations to restructure taxes and incentives to combat environmental issues. In addition to the increase in carbon tax and plastic bag levy, government is considering restructuring of the general fuel levy to include a local air pollution emissions component.
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