2023 Budget Speech Highlights

Key points:

  • 9% adjustment to individual income tax brackets and rebates
  • Fuel and Road Accident Fund Levies remain unchanged
  • Sin tax to increase by 4.9%
  • 25% tax rebate for individuals for the installation of rooftop solar panels, limited to R 15 000. This will only be available for 1 year and not applicable to batteries or inverters.
  • An expanded tax incentive for businesses of 125% of the cost of renewable energy assets used for electricity generation, brought into use during a period of 2 years from 1 March 2023.
  • 10% increase on tax brackets to withdrawal and retirement lump sum benefits, with tax rates remaining unchanged
  • Diesel fuel levy refund will be extended to food manufacturers for a period of 2 years, from 1 April 2023 to 31 March 2025
  • Increase of the health promotion levy on beverages to 2.3 cents per gram of sugar is delayed until 1 April 2025.

Two-pot system proposal:

Phase 1 of the legislative amendments to the retirement system is set to take effect on 1 March 2024 once public consultation has been finalized. The aim is to allow members access to a portion of their retirement savings while the balance is left for retirement. More work is still needs to be done before the implementation is finalized.

Tax scales and benefits for 2023/2024 tax year of assessment:

Personal income tax

Taxable income Tax Rate
R 0 – R 237,000 18%
R 237,001 – R 370 500 R 42,678 plus 26% of the amount exceeding R 237,100
R 370 501 – R 512 800 R 77,362 plus 31% of the amount exceeding R 370,500
R 512 801 – R 673 000 R 121,475 plus 36% of the amount exceeding R 512,800
R 673 001 – R 857 900 R 179,147 plus 39% of the amount exceeding R 673,000
R 857 901 – R 1 817 000 R 251,258 plus 41% of the amount exceeding R 857,900
R 1 817 001 and above R 644,489 plus 45% of the amount exceeding R 1,817,000

Tax thresholds:

  • R 957 750 for taxpayers younger than 65
  • R148 217 for taxpayers age 65 to 74
  • R165 689 for taxpayers age 75 and over

Rebates:

  • Primary R 17 235 for taxpayers younger than 65
  • Secondary R 9 444 for taxpayers age 65 to 74
  • Tertiary R 3 145 for taxpayers age 75 and over

Medical Scheme Rebates:

  • R 364 per month per beneficiary for the first 2 beneficiaries
  • R 246 per month for each additional beneficiary

Retirement Benefits:

Pre-retirement

Withdrawal Benefits Rate of Tax
R0 – R27 500 0%
R27 501 – R726 000 18% of the amount above R27 500
R726 001 – R1 089 000 R125 730 plus 27% of the amount above R726 000
R1 089 001 upwards R223 740 plus 36% of the amount above R1 089 000

Post-retirement

Retirement Lump Sum Benefits Rate of Tax
R0 – R550 000 0%
R550 001 – R770 000 18% of the amount above R550 000
R770 001 – R1 155 000 R39 600 plus 27% of the amount above R770 000
R1 155 001 – upwards R143 500 plus 36% of the amount above R1 155 000

The following remain unchanged:

  • Income tax on trusts (45%)
  • Local interest tax exemptions (23500 for individuals younger than 65 and R 34 500 for individuals 65 years and older
  • Capital gains tax (CGT) inclusion rate remains at 40% for individuals and special trusts, and 80% for other taxpayers. Annual exclusions remain at R 40 000 for both individuals and special trusts, and R 300 000 for individuals in the year of death.
  • Dividend tax at 20%
  • Withholding tax at 15%
  • Tax-free savings account contributions remail an R 36 000 per annum and a lifetime limit of R 500 000.
  • Estate duty remains at 20%
  • No changes on Donations tax or exemptions.
  • Deductions to Retirement Fund is still limited to 27.5% of the greater of the amount of remuneration for PAYE purposes or taxable income (excluding retirement fund lump sums and severance benefits). The deduction is further limited to the lower of R350 000 or 27.5% of taxable income, before the inclusion of a taxable capital gain.

Disclaimer:

The information contained in this document is provided in good faith and neither the Fund nor m Cubed Employee Benefits (Pty) Ltd (or any of its officers, agents, employees or associates) can be held liable for any damages and /or losses of whatever nature and howsoever caused as a result of the reliance on the information contained herein. Should the information conflict with the rules of the Fund or the insurer’s policies relating to the insured risk benefits, the provisions of the Rules and/or the insurer’s policies will prevail. Please note that this document is issued for information purposes only and cannot form the basis for any claim against the Fund, m Cubed Employee Benefits (Pty) Ltd (or any of its officers, agents, employees or associates) or the Insurer (or any of its officers, agents, employees or associates). Your specific benefits are shown in a separate benefit statement. The information provided is not advice as defined and contemplated in the FAIS Act.