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

1. By Kevin Yeh, CFP®
Daberistic Financial Services
Creating Financial Security, Prosperity and Wealth
www.daberistic.com
info@daberistic.com
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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
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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
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4. Our product providers
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5. Uncle Pravin
Courtesy: fin24
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6. What do people say about our uncle’s
speech
Gordhan did his best
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7. Pravin’s budget highlight
1. In line with the National Development Plan
2. R7bn tax relief for individual tax payers
3. Budget deficit at 4.6% in 2013/14
4. Economic growth 2.7% in 2013
5. Inflation stable at 5.7% in 2013
6. Net loan debt 38.6% of GDP in 2013/14
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8. Pravin’s budget highlight
Budget 2013/14 (in R bn)
1,200
1,000
800
600 1149.4
985.7
400
200
0
Revenue Spending
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9. Pravin’s budget highlight
8. Personal tax threshold R67,111 (R63,556)
9. Sin taxes go up between 5% and 10%
10.Fuel levy up 23c
11.Levy on plastic shopping bags up to 6c
12.Social grants up by 4% ~ 5%
13.Medical aid credit R242 first two/R162
additional
14.Consider making transfer to preservation fund
compulsory when changing employer
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10. Pravin’s budget highlight
15.Youth employment incentive to be tabled
16.Upgrade infrastructure: R827bn
17.Moderate employment growth
18.Spending cuts of R10.4bn next 3 years
19.Tax relief for small businesses
20.Special economic zone – 15% corporate tax
21.Review of mining tax
22.Encourage investments and trades with Africa
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11. Pravin’s budget highlight
15.Youth employment incentive to be tabled
16.Upgrade infrastructure: R827bn
17.Moderate employment growth
18.Spending cuts of R10.4bn next 3 years
19.Tax relief for small businesses
20.Special economic zone – 15% corporate tax
21.Review of mining tax
22.Encourage investments and trades with Africa
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12. Individual Taxes
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13. Individual taxes – younger than 65
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14. Personal income tax rate
Taxable Income (R) Rates of tax
R0 – 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%
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15. Individual taxes
Rebates
Primary (Under age 65) R12,080
Secondary (65 – 75) R6,750
Tertiary (age 75 and over) R2,250
Tax threshold
Below age 65 R67,111
Age 65 – 75 R104,611
Age 75 and over R117,111
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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
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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%
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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%
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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
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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
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21. Retirement fund reforms
• From March 2014:
– Vested benefits protected
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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%
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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%
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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
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