South Africa to Raise Income Taxes

February 26, 2015 Taxation in South Africa

PRETORIA – South Africans will soon be paying more taxes on their incomes, fuel, alcohol, and cigarettes.

In a speech delivered on February 25th the Minister of Finance of South Africa Nhlanhla Nene announced that the rate of tax on personal incomes will be raised for all but the lowest income-earners in the country.

The new increase in the rate of tax on personal incomes is the first hike since 1995, and will apply to all income brackets except for individuals earning less than ZAR 181 000 per year, and following the hike, the top marginal tax rate on incomes will rise to 41 percent.

In addition to the increase in income taxes, the government will also raise the national fuel levy by ZAR 0.805 per litre, noting that the rise will be offset by the recent drop in fuel prices.

The taxes on alcohol will also be raised, increasing by ZAR 0.15 for wine, ZAR 0.45 on sparkling wine, and ZAR 3.77 on whisky and other spirits, while the tax on a pack of cigarettes will rise by ZAR 0.82.

The tax hikes are intended to help raise the extra tax revenues needed to control the national budget deficit, which needs to be reined in to prevent the national bonds from being downgraded even further into junk status.

Photo By: flowcomm