As a business, navigating every new tax increase that is enforced can be time-consuming and difficult. However, if you missed the Nation Budget Speech, or have forgotten what was announced, we’ve got you covered! In this article, we will discuss some of the most important changes that occurred in the latest speech.
The Outcome of the 2023 National Budget Speech
The 2023 National Budget Speech held some interesting information with many surprised that some taxes will not be increasing in 2023. It also revealed that the GDP is expected to increase by 0.9% in 2023. With this said, let’s dive into what has and hasn’t changed.
Corporate Income Tax
CIT (Corporate Income Tax) is the tax applied to companies and imposed upon their profits over a certain period of time. To many’s surprise and relief, it was announced that corporate income tax will not be increasing in 2023. It is currently and will continue to be set at 27%. In the previous year, it dropped from 28% to the current 27%.
Capital Gains Tax
CGT (Capital Gains Tax) can be defined as the tax imposed upon financial gain received from the sale of a business, property, or similar. This tax is applied to individuals, companies, or trusts. It should be mentioned that individuals, companies, and trusts all pay different percentages of the tax. The CGT for 2023 has been set at 18% for individuals, 21.6% for companies, and 36% for trusts. Therefore, it has remained the same and has not increased or decreased since 2022.
Personal Income Tax
For the year of 2023, it has been decided that tax relief be granted to personal income taxpayers. This has been done by adjusting the personal income tax bracket and rebates. This has been done to combat the effect of inflation.
Renewable Energy Rebates
Renewable energy might have had the most interesting change as the tax incentive for businesses has been expanded to 125%. Individuals will also be benefiting as a rebate of 25% has been initiated for the purchase and installation of solar PV panels. However, there is a cap of R15 000 per individual and certain conditions must be adhered to.
General Fuel Levy
To many’s relief after the exorbitant fuel prices experienced in 2022, there will be no changes or increases to the general fuel levy and road accident fund levy. Therefore, individuals can breathe a sigh of relief, knowing that they will still be able to afford driving to and from work.
Excise Duty Tax
Excise duties on products such as alcohol and tobacco have received an increase of 4.9%. There is more detailed information that can be found in a report released by SARS (the South African Revenue Service) You can view the document here.
How PaySpace Can Help Navigate the Tax Increase in 2023
Keeping track of these changes can be a daunting exercise. Some of these changes do affect the payroll process and it is therefore important for payroll administrators to remain informed. Luckily, we at PaySpace stay up to date for you and we implement these changes on our cloud-native payroll software. This ensures that you will remain compliant no matter how many new changes come into play.
Contact us at PaySpace to find out more about how we handle and include tax increases in our software.