National budget likely to favour low earners
The treasury will focus on easing tax obligations for low- income earners, small businesses and black economic empowerment deals, auditing firm Deloitte said yesterday.
Last year Finance Minister Trevor Manuel said: "This is the year of plenty, when all South Africans will reap the fruits of economic growth."
In that budget, tax cuts from individuals added up to R19,1 billion with a net benefit for individuals of R12,1 billion.
Deloitte taxation services director Billy Joubert said that with high economic growth last year, this year's budget would be designed to benefit people who earn less with high net worth individuals feeling the pinch. He said the tax threshold, the amount you earn before you are liable to pay tax, might stay the same at R40000 or be raised at a rate slightly less than inflation.
Nina Keyser, senior tax associate at Webber Wentzel Bowens said that Manuel should also use the budget to deal with the challenges faced by small businesses in the interest of fostering entrepreneurship and broadening businesses' tax knowledge.
Joubert agreed, saying: "The biggest entry barrier for small businesses is actually not tax, but the huge administrative burden. We hope that the government will ease the obligation of small business to encourage more entrepreneurs."