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Tax Credit for Medical-Aid Contributions |
| Source: |
BuaNews |
| Source Date: |
Monday, February 27, 2012 |
| Focus: |
Knowledge Management in Government
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| Country: |
South Africa |
| Created: |
Feb 27, 2012 |
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"These reforms will significantly improve the fairness of the personal income tax system," he said.
The general fuel levy on petrol and diesel will increase by 20c with effect from April 4 and the Road Accident Fund will increase by 8c to 88c/l.
The levy on electricity generated from non-renewable sources would rise by 1c a kilowatt hour from July 1 and will replace the current funding mechanism for energy-efficiency initiatives such as the solar-water geyser programme.
Gordhan said, however, he expected there to be little overall impact on electricity tariffs.
With effect from October, an ad valorem excise duty at a rate of 7% will apply to small aeroplanes and helicopters with a mass of below 5 tons, while a duty of 10% will apply to motorboats and sailboats longer than 10 meters.
To encourage South Africans to save more, Gordhan said the National Treasury was looking at offering individuals the ability to save up to R30 000 a year - and a lifetime limit of up to R500 000 - without having to pay tax on the interest, dividends and capital gains earned on this amount.
Added to this, reform of the tax treatment of contributions to retirement funds is also envisaged to take effect in 2014.
Following the 2011 Budget proposal on gambling, the National Treasury has proposed that a national tax on gambling revenue be introduced effective from April 1 next year in the form of an additional 1% levy on a uniform provincial gambling tax base.
A similar base will be used to tax the national lottery, Gordhan said.
Gordhan said tax revenue recovered during 2010/11 and 2011/12 increased, following a slight decline in 2009/10 during the global financial crisis.
He said although tax revenue came in lower than the National Treasury's estimate for 2011 in February last year, the revised estimate for 2011/12 of R739 billion is R10 billion higher than projected in last year's Medium Term Budget Policy Statement.
The South African Revenue Service (Sars) received five million returns in the last tax season, which is a 23% increase over the year before.
Gordhan said Sars' voluntary disclosure programme had attracted about 18 000 applications and yielded almost R1 billion in additional tax so far.
He said Sars has, since April 1 last year, issued over 700 000 taxpayers with administrative penalties for failing to submit their income tax return on time.
Since April, over 230 taxpayers were prosecuted for a range of tax-related offences, resulting in sentences totalling 370 years and nearly R5 million in fines.
A further 1 500 tax-related cases are awaiting prosecution with the National Prosecuting Authority (NPA).
A dedicated ombud for tax matters would be set up this year to deal with administrative difficulties that can't be resolved by Sars.
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Tax Credit for Medical-Aid Contributions The Minister of Finance Pravin Gordhan today announced the introduction of a tax credit on medical aid contributions While revealing that R9.5 billion would be granted in personal tax relief Gordhan said as of March 1 this year a tax credit for medical-aid contributions will be introduced at a rate of R230 a month for the first two beneficiaries on a scheme and R154 for additional beneficiaries Taxpayers 65 years and older with disabilities will be included in the second phase of the reform which will be implemented in 2014 Gordhan said
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