"BUDGET 2010 HOW DO WE COMPARE"
BUDGET 2010: HOW DO WE COMPARE WE SAID HE SAID TAX ADMINISTRATION BILL (‘TAB’) Too early for any indications of changes to No indication was given of the effective the draft legislation date of the TAB. CORPORATE INCOME TAX No change expected to the corporate tax No changes were made to the corporate rate income tax rate Unlikely that STC to be replaced by the No mention was made of the effective date dividend withholding tax in the current of the new dividends tax but it will not be in year the next year. MINING ROYALTY TAX No major changes expected to be No mention was made of mining royalty tax announced around the mining royalty tax FINANCIAL INSTITUTIONS Rigorous regulation and compliance will SARS to focus on sophisticated tax loophole continue to be a major focus area structures INDIRECT TAX – CUSTOMS Indication on whether all existing cars will Announced a flat rate of CO2 emissions tax be impacted by carbon tax on annual car on new passenger motor vehicles to be license implemented on 1 September 2010 INDIVIDUAL TAX Possible changes to maximum marginal No changes were made to the marginal tax rate rate. Tax exempt portion of retrenchment The income-tax exemption for packages to be reviewed retrenchment packages will be merged into the retirement lump sum tax exemption. Contribution level – monetary The annual tax-free interest income will be limits(10(1)(x), interest exemptions etc) increased Clarity on the formula for use of Government aims to limit salary-structuring residential accommodation opportunities. INTERNATIONAL TAX Incentives to stimulate investment in SA Government proposed enhancing SA position as a viable location from which business can expand into Africa. TRANSFER PRICING Increased enforcement of TP rules via Proposed uniform set of transfer pricing exchange control system rules to align both the onshore and offshore transaction. ECONOMIC The 2009/10 budget deficit is likely to Estimated budget deficit for 2009/10 has come in at around 8.5% of GDP (7.6% come in at 7.3% of GDP. forecast in October budget) The public borrowing requirement in The public borrowing requirement is 2009/10 is likely to exceed 12% of GDP expected to rise to 11.1% of GDP. (11.8% forecast in October) Government will announce new measures The minister announced a subsidy to to tackle unemployment employers that will lower the cost of hiring young people without work experience National Treasury will revise its forecast Forecast of GDP growth revised to 2.3% GDP growth forecast of 1.5% 2010 somewhat higher