Part of my duties at work is to monitor the budget in order to determine if we need system changes (but also to amend data on our Tax – Guide available to clients). Some changes like the annual changes in the Pay As You Earn (PAYE) income tax scales is reference data. In other words we just change the numbers and the system picks it up and applies the correct values. But some changes needs programming. Now you do not want to be surprised with budget announcements which needs programming to apply it. But if that is the case you better find it out as quickly as possible. I am glad to say that no programming is needed this year despite VAT having increased to 15% because that/vat was expected last year.
Traditionally I send out a lighthearted pre-budget teaser to the company, followed up by a summary of the budget aimed at the Financial services industry. It is an internal email to all our employees, thus I have some freedom to include information which would normally not be sent to clients. This morning an email was sent stating a ring has been found and can be picked up at reception and that gave me an idea I simply replied to all with this message and images…
I sent the following email when the information was released and after I worked through it on the Treasury website.
Budget 2018 for the 2019 tax year and the fiscal year starting 1 April 2018
I refer to the questions in the previous “ring” mail
My few words.
- An investor friendly budget (no increases to CGT and withholding tax, marginal rate, withdrawal benefits and lump sum benefits)
- and Information technology friendly budget as the increase in VAT was expected last year.
Of the major taxes only VAT increased. But this will probably be a major issue for the Unions
Will the riches of the affluent be ring-fenced? NO (not yet). The Davis report is not completed yet.
The tax proposals for the 2018 Budget are designed to generate an additional R36 billion in tax revenue for 2018/19. The main tax proposals for the 2018 Budget are:
Later I followed it up with this email:
Just for the record I have not answered the question which an average Joe like me is most interested in.
There is personal tax relief for everybody but this is actually to decrease fiscal drag (bracket creep) to decrease the impact of tax on individuals receiving a raise. This relief is lower than inflation which effectively increases the tax R6.5 billion.
• On the lower end a person earning R196 000 will pay about a R1 000 less tax
• In the middle a person earning R423 000 will pay about R1 400 less tax
• A R1.5 million earner will pay about R1 500 less tax
Well there you have it, it could have been a worse budget fortunately it wasn’t.
And although I would like to I did not include these cartoons. Our current President Cyril Ramaphosa is certainly having an impact on what we abhorred excessively regarding our previous president – let’s trust all of the rhetoric becomes historic facts.