On 21 February 2018, Finance Minister Malusi Gigaba delivered the 2018 budget speech and these are the changes that have been noted:
- VAT has increased from 14% to 15% and will take effect from 1 April 2018. This increase will affect 80% of higher income earners. Zero-rating food, such as brown bread, will remain VAT-free.
- The personal income tax of those earning between R0 – R555 600 per annum will remain unchanged, while those who earn more than R555 601 per annum will be affected by a 3.1% increase.
- Estate Duty rates have increased by 5% on dutiable estates in excess of R30 million. The same percentage increase is applicable on donations in excess of R30 million. This means that the rates have moved from 20% and now sit at 25%.
- Sin Tax will increase by 6 – 10%. Tobacco will increase by 8.5%. The table below details the increases:
| Increase | |
| Malt beer | 15c per 340ml can |
| Unfortified wine | 23c per 750ml bottle |
| Fortified wine | 28c per 750ml bottle |
| Sparkling wine | 73c per 750ml bottle |
| Ciders and alcoholic fruit beverages | 15c per 340ml bottle |
| Spirits | R4.80 per 750ml bottle |
| Cigarettes | R1.22 per pack of 20 |
| Cigarette tobacco | R1.37 per 50g |
| Pipe tobacco | 39c per 25g |
| Cigars | R6.45 per 23g |
- The maximum ad valorem excise duty for motor vehicles and luxury goods will increase from 7% to 9% effective 1 April 2018.
- General Fuel Levy will increase by 22 cents per litre, and the Road Accident Fund Levy will increase by 30 cents per litre.
- Social grants will increase as per the table below:
| Increase | Total amount | |
| Disability Grant | R90 | R1690 |
| Care Dependency Grant | R90 | R1690 |
| Child Support Grant | R20 | R400 |
| Old Age Grant | R90 | R1690 |
Transfer Duty Amendments:
Transfer duty fees have remained unchanged. The following rates on transactions in respect of acquisition of property is payable (and not subject to VAT).
| Value of Property (R) | Rate |
| 0 – 900 000 | 0% |
| 900 001 – 1 250 000 | 3% of the value above 900 000 |
| 1 250 001 – 1 750 000 | 10 500 + 6% of the value above 1 250 000 |
| 1 750 001 – 2 250 000 | 40 500 + 8% of the value above 1 750 000 |
| 2 250 001 – 10 000 000 | 80 500 + 11% of the value above 2 250 000 |
| 10 000 001 and above | 933 000 + 13% of the value above 10 000 000 |
Estate Duty Amendments:
The 2018 Budget proposes to increase estate duty from 20% to 25% for estates worth R30 million and more.
Any donations above R30 million in one tax year will be taxed at 25%, in order to limit the staggering of donations and avoid the higher estate duty rate. Both measures will be effective from 1 March 2018.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)