Rates and Monetary Amounts and Amendment of Revenue Laws Bill, 2013 Presenters: Ismail Momoniat & Cecil Morden 18 September 2013
Contents: Rates & Monetary Amounts Overview Revenue trends Personal income tax brackets and rebates Medical tax credits Savings tax free interest threshold Low-cost housing - cost- Depreciation Small business corporations Specific excise duties Regulations Motor Vehicle CO 2 emissions tax, Plastic bag levy & Incandescent light bulb levy Fuel taxes 2
Overview The tax system raises revenue to fund government programmes and deliver services. Taxes are also used to change taxpayers behaviours by influencing market prices (in an attempt to reflect externalities) and various incentives. While the South African economy has continued to grow since the 2009 recession, the moderate pace of economic growth has adversely affected revenue performance. Modest nominal growth tax revenues during 2012/13 is largely the result of weak economic growth during the second half of 2012, labour unrest and lower commodity prices. Tax revenues are expected to improve over the medium-term expenditure framework (MTEF) period in line with expectations of improved economic growth and marginally higher levels commodity prices. Higher revenue collections will depend on an improved economic growth outlook. 3
% Gross Tax Revenue as a % of GDP 29.0% Gross Tax revenue / GDP Ratio (National Government, excl. RAF & UIF) 28.0% 27.0% 2007/08, 27.6% 26.0% 25.0% 24.0% 1989/90, 24.7% 2004/05, 24.5% 2012/13, 25.4% 23.0% 22.0% 21.0% 1992/93, 21.9% 20.0% 19.0% 18.0% 17.0% 16.0% 15.0% YEAR 4
% Total tax revenue: Direct vs. Indirect taxes since 1983/84 66% Total Tax Revenue: Direct vs Indirect Taxes 64% 62% 2008/09, 62.7% 60% 58% 56% 54% 52% 1993/94, 52.6% 2011/12, 59.1% 50% 48% 46% 44% 42% 2011/12, 40.9% 40% 38% 36% 2008/09, 37.3% 34% 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1994/95 1993/94 1992/93 1991/92 1990/91 1989/90 1988/89 1987/88 1986/87 1985/86 1984/85 1983/84 YEAR Direct Taxes Indirect Taxes 5
1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 % Three main tax instruments as a % of GDP 12% TAX/GDP ratio (three main taxes) 10% 1999/00, 10.3% 8% 6% 4% 2% 1999/00, 2.5% 0% Fiscal Year PIT CIT VAT 6
Fiscal Year 2012/13 Tax Revenue Fiscal Year 2012/13 Estimates Differences Tax Revenue: R million: 2012/13 BR - 2012 MTBPS - 2012 BR - 2013 Actual Actual - less BR 2012 Actual - less MTBPS - 2012 Actual - less BR 2013 1 Persons and individuals 285 970 282 008 274 020 275 805-10 165-6 203 1 785 2 Companies 167 839 166 229 156 350 158 947-8 892-7 282 2 597 3 Value added tax 209 975 212 000 217 000 215 840 5 865 3 840-1 160 4 Fuel taxes 42 776 41 000 40 500 40 320-2 456-680 -180 5 Customs duties 36 160 38 000 37 640 38 674 2 514 674 1 034-6 Specific excise duties 28 772 28 500 28 360 28 459-313 41 99 7 STC / WTD 19 050 18 800 21 000 19 739 689 939-1 261 Sub - Total 790 542 786 537 774 870 777 784-12 758-8 753 2 914 Gross tax revenue 826 401 821 401 810 150 813 835-12 566-7 566 3 685 7
Tax Revenue 2012/13 R million 95 000 Gross Tax Revenue R million 32 500 30 500 Personal Income Tax Collections 85 000 28 500 75 000 65 000 26 500 24 500 22 500 55 000 20 500 45 000 18 500 16 500 35 000 14 500 25 000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 12 500 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2009/10 2010/11 2011/12 2012/13 2009/10 2010/11 2011/12 2012/13 8
APR MAY JUN JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC JAN FEB MAR R' 000 R' 000 CIT Revenue 2012/13 50 000 000 Provisional Corporate Income Tax Mining and Quarrying 45 000 000 10 000 000 40 000 000 9 000 000 35 000 000 8 000 000 30 000 000 25 000 000 20 000 000 15 000 000 7 000 000 6 000 000 5 000 000 4 000 000 3 000 000 10 000 000 2 000 000 5 000 000 1 000 000 - - 2009/10 2010/11 2011/12 2012/13 2009/10 2010/11 2011/12 2012/13 9
Tax Revenue - MTEF Tax Revenue: R million 2011/12 2012/13 2013/14 2014/15 2015/16 1 Persons and individuals 250 400 275 805 306 188 337 420 372 160 2 Companies 151 627 158 947 170 690 191 376 214 745 3 Value added tax 191 020 215 840 242 990 270 540 304 010 4 Fuel taxes 36 602 40 320 44 970 46 580 48 360 5 Customs duties 34 057 38 674 41 340 46 020 51 830 6 Specific excise duties 25 411 28 459 31 265 32 390 33 630 7 STC / WTD 21 965 19 739 22 930 25 840 29 000 Sub - Total 711 082 777 784 860 373 950 166 1 053 735 Gross tax revenue 742 651 813 835 898 004 991 830 1 098 955 GDP - Nominal 2 973 286 3 209 142 3 520 268 3 880 406 4 270 848 10
Tax Revenue MTEF: % Share % Share 2011/12 2012/13 2013/14 2014/15 2015/16 1 Persons and individuals 33.7% 33.9% 34.1% 34.0% 33.9% 2 Companies 20.4% 19.5% 19.0% 19.3% 19.5% 3 Value added tax 25.7% 26.5% 27.1% 27.3% 27.7% 4 Fuel taxes 4.9% 5.0% 5.0% 4.7% 4.4% 5 Customs duties 4.6% 4.8% 4.6% 4.6% 4.7% 6 Specific excise duties 3.4% 3.5% 3.5% 3.3% 3.1% 7 STC / WTD 3.0% 2.4% 2.6% 2.6% 2.6% Sub - Total 95.7% 95.6% 95.8% 95.8% 95.9% Gross tax revenue 100% 100% 100% 100% 100% Gross tax revenue/gdp 25.0% 25.4% 25.5% 25.6% 25.7% 11
Tax Revenue MTEF: Y-o-Y % Change Y-on-Y % Change 2011/12 2012/13 2013/14 2014/15 2015/16 1 Persons and individuals 10.3% 10.1% 11.0% 10.2% 10.3% 2 Companies 14.1% 4.8% 7.4% 12.1% 12.2% 3 Value added tax 4.1% 13.0% 12.6% 11.3% 12.4% 4 Fuel taxes 6.3% 10.2% 11.5% 3.6% 3.8% 5 Customs duties 26.6% 13.6% 6.9% 11.3% 12.6% 6 Specific excise duties 4.1% 13.0% 9.9% 3.6% 3.8% 7 STC / WTD 27.9% -10.1% 16.2% 12.7% 12.2% Sub - Total 10.3% 9.4% 10.6% 10.4% 10.9% Gross tax revenue 10.2% 9.6% 10.3% 10.4% 10.8% GDP - Nominal 8.7% 7.9% 9.7% 10.2% 10.1% Gross tax revenue/gdp - multiplier 1.17 1.21 1.07 1.02 1.07 12
Estimated tax revenue impact of Budget 2013 tax proposals Table 4.10 Impact of tax proposals on 2013/14 revenue R million Effect of tax proposals Tax revenue (before tax proposals) 900 416 Non-tax revenue 18 336 Less: SACU payments -43 374 National budget revenue 875 378 Provinces, social security funds and selected public entities 114 273 Budget revenue (before tax proposals) 989 651 Budget 2013/14 proposals: -2 412 Taxes on individuals and companies -8 242 Personal income tax -7 382 Adjustment in personal tax rate structure -7 032 Adjustment in monetary thresholds -350 Business income tax -860 Employment tax incentive -500 Small business corporations -360 Indirect taxes 5 830 Increase in general fuel levy 3 270 Increase in excise duties on tobacco products 855 Increase in alcoholic beverages 1 210 Increase in incandescent bulb levy 50 Increase in plastic bag levy 90 Increase in CO 2 vehicle emission tax 355 Tax revenue (after tax proposals) 898 004 Budget revenue (after tax proposals) 987 240 13
Personal Income Tax Relief Personal income tax provides the foundation for an equitable and progressive tax system. Personal income tax brackets and rebates are partially adjusted for fiscal drag to take into account some of the wage inflation. The 2013 Budget proposes direct personal income tax relief of R7 billion. In addition, adjustments to the monetary thresholds, such as the medical tax credit, will provide relief of about R350 million. 14
Personal Income Tax Brackets Table 4.5 Personal income tax rate and bracket adjustments, 2012/13 2013/14 2012/13 2013/14 Taxable income (R) Rates of tax Taxable income (R) Rates of tax R0 - R160 000 18% of each R1 R0 - R165 600 18% of each R1 R160 001 - R250 000 R28 800 + 25% of the amount R165 601 - R258 750 R29 808 + 25% of the amount above R160 000 above R165 600 R250 001 - R346 000 R51 300 + 30% of the amount R258 751 - R358 110 R53 096 + 30% of the amount above R250 000 above R258 750 R346 001 - R484 000 R80 100 + 35% of the amount R358 111 - R500 940 R82 904 + 35% of the amount above R346 000 above R358 110 R484 001 - R617 000 R128 400 + 38% of the amount R500 941 - R638 600 R132 894 + 38% of the amount above R484 000 above R500 940 R617 001 R178 940 + 40% of the amount R638 601 R185 205 + 40% of the amount above R617 000 above R638 600 Rebates Rebates Primary R11 440 Primary R12 080 Secondary R6 390 Secondary R6 750 Tertiary R2 130 Tertiary R2 250 Tax threshold Tax threshold Below age 65 R63 556 Below age 65 R67 111 Age 65 and over R99 056 Age 65 and over R104 611 Age 75 and over R110 889 Age 75 and over R117 111 15
Personal Income Tax: Estimates 2013/14 Table 4.6 Estimates of individual taxpayers and taxable income, 2013/14 Taxpayers Taxable income Income tax payable Taxable bracket Number % R million % R million % R million % R million % 0 to R60 000 8 067 075 155 911 10.8 R60 001 to R150 000 3 018 270 47.4 279 699 19.4 18 924 6.0 1 867 26.6 17 057 5.6 R150 001 to R250 000 1 596 649 25.1 290 735 20.2 42 148 13.4 1 579 22.5 40 569 13.2 R250 001 to R350 000 853 430 13.4 239 884 16.6 47 821 15.3 1 269 18.1 46 551 15.2 R350 001 to R500 000 362 713 5.7 145 761 10.1 36 217 11.5 759 10.8 35 458 11.6 R500 001 to R750 000 187 374 2.9 97 202 6.7 27 470 8.8 487 6.9 26 983 8.8 R750 001 to R1 000 000 203 646 3.2 142 687 9.9 45 711 14.6 618 8.8 45 093 14.7 R1 000 001 + 148 468 2.3 246 803 17.1 95 279 30.4 452 6.4 94 827 30.9 Total 6 370 550 100.0 1 442 771 100.0 313 570 100.0 7 032 100.0 306 538 100.0 Grand total 14 437 625 1 598 682 Personal income tax relief Tax revenue 16
PIT History of PIT Relief (fiscal drag) Personal Income Tax Taxable Income Taxable Income Income tax threshold Rebate PIT relief PIT bracket PIT bracket Budget Tax year < 65 65 and > 75 and > Primary Secondary Tertiary R billion Bottom Top Bottom Top Rand Rand % Change % Change 1 2013 2013/14 67 111 104 611 117 111 12 080 6 750 2 250 7.0 165 600 638 600 3.5% 3.5% 2 2012 2012/13 63 556 99 056 110 889 11 440 6 390 2 130 9.5 160 000 617 000 6.7% 6.4% 3 2011 2011/12 59 750 93 150 104 261 10 755 6 012 2 000 8.1 150 000 580 000 7.1% 5.1% 4 2010 2010/11 57 000 88 528 10 260 5 675 6.5 140 000 552 000 6.1% 5.1% 5 2009 2009/10 54 200 84 200 9 756 5 400 13.5 132 000 525 000 8.2% 7.1% 6 2008 2008/09 46 000 74 000 8 280 5 040 7.2 122 000 490 000 8.4% 8.9% 7 2007 2007/08 43 000 69 000 7 740 4 680 8.4 112 500 450 000 12.5% 12.5% 8 2006 2006/07 40 000 65 000 7 200 4 500 13.5 100 000 400 000 25.0% 33.3% 9 2005 2005/06 35 000 60 000 6 300 4 500 6.8 80 000 300 000 8.1% 11.1% 10 2004 2004/05 32 222 50 000 5 800 3 200 4.0 74 000 270 000 5.7% 5.9% 11 2003 2003/04 30 000 47 222 5 400 3 100 13.3 70 000 255 000 75.0% 6.3% 12 2002 2002/03 27 000 42 640 4 860 3 000 15.0 40 000 240 000 5.3% 11.6% 13 2001 2001/02 23 000 39 154 4 140 3 000 8.3 38 000 215 000 8.6% 7.5% 14 2000 2000/01 21 111 36 538 3 800 2 900 9.9 35 000 200 000 6.1% 66.7% 15 1999 1999/00 19 526 33 717 3 710 2 775 4.9 33 000 120 000 6.5% 0.0% 16 1998 1998/99 18 500 31 950 3 515 2 660 3.7 31 000 120 000 Avg. pa % increase 9.0% 8.2% 8.6% 6.4% 139.5 11.8% 11.8% 2013 vs 2002 2.49 2.45 2.49 2.25 4.14 2.66 17
PIT rates Taxable Income PIT bracket Marginal personal incoem tax rate for the six brackets Budget Tax year Bottom Top 1 2 3 4 5 6 1 2013 2013/14 165 600 638 600 18% 25% 30% 35% 38% 40% 2 2012 2012/13 160 000 617 000 18% 25% 30% 35% 38% 40% 3 2011 2011/12 150 000 580 000 18% 25% 30% 35% 38% 40% 4 2010 2010/11 140 000 552 000 18% 25% 30% 35% 38% 40% 5 2009 2009/10 132 000 525 000 18% 25% 30% 35% 38% 40% 6 2008 2008/09 122 000 490 000 18% 25% 30% 35% 38% 40% 7 2007 2007/08 112 500 450 000 18% 25% 30% 35% 38% 40% 8 2006 2006/07 100 000 400 000 18% 25% 30% 35% 38% 40% 9 2005 2005/06 80 000 300 000 18% 25% 30% 35% 38% 40% 10 2004 2004/05 74 000 270 000 18% 25% 30% 35% 38% 40% 11 2003 2003/04 70 000 255 000 18% 25% 30% 35% 38% 40% 12 2002 2002/03 40 000 240 000 18% 25% 30% 35% 38% 40% 13 2001 2001/02 38 000 215 000 18% 26% 32% 37% 40% 42% 14 2000 2000/01 35 000 200 000 18% 26% 32% 37% 40% 42% 15 1999 1999/00 33 000 120 000 19% 30% 35% 40% 44% 45% 16 1998 1998/99 31 000 120 000 19% 30% 39% 43% 44% 45% 18
Personal Income Tax Revenue as a % of Compensation of Employees 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 23.0% "Average Effective" PIT rate: PIT Rev. as a % of COE 21.0% 1999/00, 21.4% 19.0% 17.0% 15.0% 2003/04, 17.1% 13.0% 11.0% 9.0% 7.0% 5.0% 19
1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Personal Income Tax (PIT) PIT, Top Marginal rate (lhs) and PIT as % of GDP (rhs) 55% 11.0% 1998/99, 10.3% 10.0% 50% 45% 1988/89, 45% 1996/97, 45% 2010/11, 8.2% 2006/07, 7.7% 9.0% 8.0% 40% 1992/93, 43% 2000/01, 42% Top M PIT Rate PIT: % of GDP 2002/03, 40% 7.0% 6.0% 35% 5.0% 30% 4.0% 20
Medical tax credits: 2013/14 Medical tax credits are a more equitable form of relief than medical deductions because the relative value of the relief does not increase with higher income levels. Monthly tax credits will be increased from R230 to R242 for each of the first two beneficiaries and from R154 to R162 for each additional beneficiary with effect from 1 March 2013. 21
Non-Retirement Savings Government intends to proceed with the implementation of tax-preferred savings and investment accounts. All returns accrued within these accounts and any withdrawals would be exempt from tax. The account would have an initial annual contribution limit of R30 000 and a lifetime limit of R500 000, to be increased regularly in line with inflation. The new accounts will be introduced by April 2015. (For 2014 legislation) In the meantime, with effect from 1 March 2013, tax-free interest-income annual thresholds will be increased from R33 000 to R34 500 for individuals 65 years and over, and from R22 800 to R23 800 for individuals below 65 years. These thresholds will not be adjusted for inflation in future years. 22
Low cost housing depreciation & UDZ Table C.6 Miscellaneous proposals, 2012/13 2013/14 Description Low-cost housing Max cost of residential unit where that residential unit is an apartment in a building, paragraph (a) Max cost of residential unit where that residential unit is an apartment in a building, paragraph (b) Exempt scholarships and bursaries Illustrative thresholds 2012/13 Proposed thresholds 2013/14 R250 000 R350 000 R200 000 R300 000 Annual income ceiling for employees R100 000 R200 000 Annual ceiling for bursaries to employee relatives higher education Annual ceiling for bursaries to employee relatives basic education R10 000 R30 000 R10 000 R10 000 23
Small business corporations tax relief Government proposes that the R14 million turnover threshold for small business corporations be increased to R20 million and that the graduated tax structure for such corporations be revised. Taxable income Not exceeding R67 111 Exceeding R67 111 but not exceeding R365 000 Exceeding R365 000 but not exceeding R550 000 Exceeding R550 000 Rate of tax 0 per cent of taxable income 7 per cent of amount by which taxable income exceeds R67 111 R20 852 plus 21 per cent of amount by which taxable income exceeds R365 000 R59 702 plus 28 per cent of amount by which taxable income exceeds R550 000 Table 4.7 Small business corporations, 2012/13 2013/14 Current rates 2012/13 Proposed rates 2013/14 Taxable Income Rate Taxable Income Rate Below R63 556 0.0% Below R67 111 0.0% R63 557 to R350 000 7.0% R67 112 to R365 000 7.0% Above R350 000 28.0% R365 001 to R550 000 21.0% Above R550 001 28.0% 24
Specific excise duties: Tobacco & Alcohol (1) The excise duties on tobacco products are determined in accordance with a targeted total tax burden (excise duties plus VAT) of 52 per cent of the retail price. Specific excise duties of tobacco products increased between 5.8 and 10 per cent on Budget Day. The current targeted tax burdens (excise duties plus VAT) expressed as a percentage of the weighted average retail selling price for wine, clear beer and spirits are 23, 35, and 48 per cent respectively. Specific excise duties on alcoholic beverages increased between 5.7 and 10 per cent on Budget Day. 25
Specific excise duties: Tobacco & Alcohol (2) Table 4.9 Changes in specific excise duties, 2013/14 Current excise Proposed excise Percentage change Product duty rate duty rate Nominal Real Malt beer R59.36 / litre R63.81 / litre 7.5% 1.9% of absolute alcohol (100.98c / average 340ml can) of absolute alcohol (108.48c / average 340ml can) Traditional African beer 7.82c / litre 7.82c / litre 0.0% -5.6% Traditional African beer 34.70c / kg 34.70c / kg 0.0% -5.6% Unfortified wine R2.50 / litre R2.70 / litre 8.0% 2.4% Fortified wine R4.59 / litre R4.85 / litre 5.7% 0.1% Sparkling wine R7.53 / litre R8.28 / litre 10.0% 4.4% Ciders and alcoholic fruit beverages R2.97 / litre R3.19 / litre 7.4% 1.9% (100.98c / average 340ml can) (108.48c / average 340ml can) Spirits R111.64 / litre R122.80 / litre 10.0% 4.4% of absolute alcohol (R36.00 / 750ml bottle) of absolute alcohol (R39.60 / 750ml bottle) Cigarettes R10.32/ 20 cigarettes R10.92/ 20 cigarettes 5.8% 0.3% Cigarette tobacco R11.05/ 50g R12.16/ 50g 10.0% 4.5% Pipe tobacco R3.22/ 25g R3.54/ 25g 9.9% 4.4% Cigars R53.05 / 23g R56.76 / 23g 7.0% 1.4% 26
Motor vehicle CO 2 emissions tax, plastic bag levy & tax on incandescent light bulbs The motor vehicle CO 2 emissions tax encourages consumers to buy vehicles with lower carbon emissions. This tax for passenger vehicles was increased from R75 to R90 for every gram of emissions/km above 120 gco 2 /km and, in the case of double cabs, from R100 to R125 for every gram/km in excess of 175 gco2/km, with effective from 1 April 2013. The levy on plastic shopping bags, which has been at 4c/bag since 2009, was increased to 6c/bag as from 1 April 2013. The levy on incandescent light bulbs was increased from R3 to R4 per bulb as from 1 April 2013. 27
Fuel taxes The general fuel levy and Road Accident Fund levy was increased by 22.5 c/l and 8 c/l respectively with effect from 3 April 2013. Since April 2010, the general fuel levy has included a new multi-product pipeline levy (7.5 c/l) component. This component was introduced for 36 months to help fund the construction of additional pipeline capacity and will come to an end on 2 April 2013. The net increase in the general fuel levy on 3 April 2013 will thus be only 15 c/l and not the full 22.5 c/l. 28
Fuel taxes Table 4.8 Total combined fuel taxes on petrol and diesel, 2011/12 2013/14 2011/12 2012/13 2013/14 93 Octane Diesel 93 Octane Diesel 93 Octane Diesel c / litre petrol petrol petrol General fuel levy 177.50 162.50 197.50 182.50 212.50 197.50 Road Accident Fund levy 80.00 80.00 88.00 88.00 96.00 96.00 Customs and excise levy 4.00 4.00 4.00 4.00 4.00 4.00 Illuminating paraffin marker 0.00 0.01 0.00 0.01 0.00 0.01 Total 261.50 246.51 289.50 274.51 312.50 297.51 Pump price: Gauteng 884.00 814.05 1 077.00 1 026.69 1 206.00 1 129.17 (as in February) 1 Taxes as percentage of pump price 29.6% 30.3% 26.9% 26.7% 25.9% 26.3% 1. Diesel (0.05% sulphur) wholesale price (retail price not regulated) 29
Thank you 30
Fuel levy petrol Fuel levy - petrol (Nominal) Fuel levy - petrol (Real) % Change (N) % Change (R) 1989 31.9 137.1 39.3% 21.4% 1990 31.9 120.0 0.0% -12.5% 1991 46.9 153.0 47.0% 27.5% 1992 54.9 157.1 17.1% 2.7% 1993 60.9 158.9 10.9% 1.2% 1994 60.9 145.8 0.0% -8.2% 1995 62.9 138.5 3.3% -5.0% 1996 71.6 146.9 13.8% 6.1% 1997 76.6 144.7 7.0% -1.5% 1998 86.6 153.0 13.1% 5.7% 1999 90.6 152.1 4.6% -0.6% 2000 95.6 152.4 5.5% 0.2% 2001 98 147.8 2.5% -3.0% 2002 98 135.4 0.0% -8.4% 2003 101 131.7 3.1% -2.8% 2004 111 142.7 9.9% 8.4% 2005 116 139.6 4.5% -2.2% 2006 116 135.4 0.0% -3.0% 2007 121 133.0 4.3% -1.8% 2008 127 127.0 5.0% -4.5% 2009 150 140.1 18.1% 10.3% 2010 167.5 150.0 11.7% 7.1% 2011 177.5 151.3 6.0% 0.9% 2012 197.5 158.8 11.3% 5.0% 2013 212.5 161.8 7.6% 1.9% 31
Fuel levy petrol cents / litre: (Nominal and Real = 2008 prices) 240 Fuel levy - petrol: Nominal & Real (2008 =100) c/litre 220 2013, 212.5 200 180 160 140 120 1993, 158.9 2008, 127.0 2013, 161.8 100 80 60 40 20 0 1993, 60.9 Fuel levy - petrol (Nominal) Fuel levy - petrol (Real) 32
Fuel levy revenue Rand million 45 000 40 000 Fuel levy revenue R mn - Nominal & Real (2008 =100) 35 000 30 000 25 000 20 000 1998, 24 099 2008, 24 884 15 000 10 000 5 000 Revenue - N Revenue - R - 33
1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Fuel levy revenue 2011/12: R36.6 billion; 21.7 billion litre; 50 800 MtCO 2 9.0% 8.0% 7.0% Fuel Levy Revenue: % of Total (lhs); % of GDP (rhs) 2.0% 1.8% 1.6% 6.0% 1.3% 1.4% 5.0% 4.0% 3.0% 2.0% Fuel Levy as % Total Tax Revenue Fuel Levy as % GDP 5.0% 1.2% 1.0% 0.8% 0.6% 0.4% 1.0% 0.2% 0.0% 0.0% YEAR 34
Fuel Sales, litres - million 14 000 12 000 Fuel Sales - Litres million 10 000 8 000 2009, 9 437 6 000 4 000 2 000 PETROL DIESEL 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 35
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Fuel Litres per real GDP 000 (2005 prices) 15 Fuel / GDP (Litres per R'000 GDP) 14 1998, 13.79 13 12 11 2012, 11.76 10 9 8 36
1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 CIT headline rate and CIT revenue 55.0% 50.0% CIT Headline rate (lhs) and CIT as a % of GDP (rhs) CIT Rate 2008/09, 7.2% 8.0% 7.0% 45.0% 1985/86, 6.0% CIT: % of GDP 6.0% 40.0% 5.0% 35.0% 1995/96, 35.0% 4.0% 30.0% 25.0% 20.0% 1993/94, 2.6% 1999/00, 30.0% 1999/00, 2.5% 2005/06, 29.0% 2008/09, 28.0% 3.0% 2.0% 15.0% 1.0% 10.0% 0.0% 37
Average effective corporate income tax rate - % of net operating surplus 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 30% "Effective" CIT rate : CIT as a % of NOS 27% 24% 21% 18% 15% 1990, 25% 2008, 23% 12% 9% 2000, 9% 6% 3% 0% CIT/NOS 38
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CIT Revenue & NOS Net operating Surplus (lhs) & CIT (rhs) 1 000 000 900 000 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000-180 000 160 000 140 000 120 000 100 000 80 000 60 000 40 000 20 000 - NOS (R million) CIT 39
R million USD/Barrel CIT Revenue & Commodity Prices 180 000 160 000 140 000 120 000 CIT Revenue Rmn (lhs) & Oil US$ per barrel 120.0 100.0 80.0 100 000 80 000 60 000 40 000 20 000 60.0 40.0 20.0-1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 0.0 CIT OIL (US/BARREL) 40
CTI Revenue (provisional) by Sector CIT - Provisional: % Share by sector 2001/02 2002/03 2003/04 2004/05 2011/12 2012/13 FINANCE, INSURANCE, REAL ESTATE AND RELATED SERVICES including Long Term Insurers 28% 31% 33% 35% 34% 36% MANUFACTURING 30% 31% 31% 32% 24% 22% RETAIL AND WHOLESALE TRADE 8% 7% 10% 11% 11% 11% TRANSPORT, STORAGE AND COMMUNICATION 8% 6% 6% 9% 8% 8% MINING AND QUARRYING 18% 17% 11% 4% 11% 8% SPECIALISED SERVICES 4% 3% 4% 4% 5% 4% OTHER 1% 0% 0% 0% 2% 4% AGENCIES AND OTHER SERVICES 1% 1% 2% 2% 2% 2% CONSTRUCTION 1% 1% 1% 1% 2% 2% AGRICULTURE, FORESTRY AND FISHING 1% 2% 2% 2% 1% 2% ELECTRICITY, GAS AND WATER 1% 1% 1% 1% 1% 1% 41
Estimated Tax Expenditure (Tax revenue forgone as a result of tax incentives) Table 4.4 Summary of tax expenditure estimates 2007/08 2010/11 R million 2007/08 2008/09 2009/10 2010/11 Personal income tax 1 24 987 29 913 33 364 38 602 Corporate income tax 2 2 613 2 715 3 321 2 754 Value-added tax 3 27 706 30 354 30 701 34 959 Customs and excise duties 4 20 334 16 714 17 139 28 912 Total tax expenditure 75 641 79 695 84 524 105 226 Tax expenditure as percentage of total gross tax revenue 13.2% 12.7% 14.1% 15.6% Total gross tax revenue 572 815 625 100 598 705 674 183 Tax expenditure as percentage of GDP 3.6% 3.5% 3.4% 3.8% 1. Retirement savings and medical expenses 2. Investment incentives, urban development zones, research and development, and learnerships 3. Zero-rating of basic food stuffs, petrol and diesel 4. Motor industry, textiles, agriculture and mining 42
Tax revenue 2012/13 Gross Tax Revenue 2012/13 Rand mn % Cumulative % 1 Personal income tax 275,805 33.9% 33.9% 2 Value added tax 215,840 26.5% 60.4% 3 Corporate income tax 158,947 19.5% 79.9% 4 Fuel levy 40,320 5.0% 84.9% 5 Custom duties 35,310 4.3% 89.2% 6 Specific excise duties 28,459 3.5% 92.7% 7 STC / WTD 19,739 2.4% 95.2% 8 Skills development levy 11,378 1.4% 96.6% 9 Transfer duty, STT, etc. 8,645 1.1% 97.6% 10 Electricity levy 7,984 1.0% 98.6% 11 Other 11,407 1.4% 100.0% TOTAL 813,834 100.0% Environmentally related taxes R million 2012/13 1 General fuel levy 40,320 2 Air passenger departure tax 873 3 Plastic bag levy 152 4 Electricity levy 7,984 5 Incandescent light bulb levy 132 6 CO2 Vehicle emissions tax 1,568 Sub Total 51,029 TOTAL Tax Revenue 813,834 Sub Total / TOTAL 6.3% 43
Department of Transport Transport - National - Budget Allocations R'000 2012/13 2013/14 2014/15 1 Departmental baseline 23,021,852 28,418,447 29,725,696 SANRAL: National Road Agency: Capital 6,394,541 7,515,300 7,849,560 SANRAL: National Road Agency: Coal haulage 648,910 665,498 696,111 PRASA: Passenger Rail Agency of SA 7,481,110 10,710,959 13,865,547 Compensation of employees 381,322 405,748 430,101 Other 8,115,969 9,120,942 6,884,377 2 Conditional Grant to Local Government 5,589,135 5,912,264 6,184,228 Public Transport: Infrastrcuture & Network Operations 3 Conditional Grant to Provincial Government 13,093,000 13,735,539 14,367,374 Provincial Road Maintenance 8,540,479 8,952,830 9,364,661 Public Transport Operation 4,552,521 4,782,709 5,002,713 4 Net additions (e.g. PRASA) 571,313 156,960 3,100,381 5 TOTAL 42,275,300 48,223,210 53,377,679 44
Medical Scheme contributions and other medical expenses - past reforms 2005/06: An employer could contribute up to two-thirds of the member s contribution as a tax-free fringe benefit 2006/07: 2/3rds tax-free provision was replaced by a monthly monetary cap (to encourage broader medical scheme coverage, extend tax benefit to self-employed individuals & achieve a more equitable tax treatment) Medical scheme contributions paid by taxpayers tax deductible (taxfree if the employer pays) subject to monthly caps(r500 first two beneficiaries % R300 for all other beneficiaries) 2007/08, 2008/09 & 2009/10: monthly caps increased: R530 & R320, and R570 & R345 and R625 & R380 2010/11- The tax-free fringe benefit for employer contributions was removed. However, employees can claim deduction for med scheme contributions, whether made by employee or by employer on behalf of employee up to the cap. Impact on employees neutral. 2010/11 & 2011/12: monthly caps: R670 & R410, and R720 & R440 45
Medical tax credits: 2014/15 (Not in this Bill) The tax credits will, as from 1 March 2014, apply to all taxpayers. Additional medical deductions will be converted into tax credits at a rate of 25 per cent for taxpayers aged below 65 years. Additional medical deductions will be converted into tax credits at a rate of 33.3 per cent for taxpayers below 65 years with disabilities or dependants with disabilities. Taxpayers 65 years and older will be able to convert all medical scheme contributions in excess of three times the total allowable tax credits plus out-of-pocket medical expenses into a tax credit of 33.3 per cent. Note that the 7.5 per cent threshold will continue not to apply in the case of taxpayers 65 years and older and those with disabilities or dependants with disabilities. Employer contributions to medical schemes on behalf of ex-employees will be a taxable fringe benefit and such ex-employees will be able to claim the appropriate tax credits. 46
Corporate Income Tax (1) Tax year 2008 [102.2% assessed tax as % of provisional tax] 2009 [97.0% assessed tax as % of provisional tax] 2010 [90.2% assessed tax as % of provisional tax] Economic activity 1 Number of taxpayers Taxable income (R million) Tax assessed (R million) Number of taxpayers Taxable income (R million) Tax assessed (R million) Number of taxpayers Taxable income (R million) Tax assessed (R million) Total < 0 taxable income 205 088-276 412 692 212 774-348 598 971 202 393-375 850 775 Total = 0 taxable income 226 991-39 218 053-31 193 357-36 Total > 0 taxable income 183 607 564 555 159 900 176 644 456 043 127 883 164 204 418 560 117 195 Total 615 686 160 631 607 471 128 886 559 954 118 006 Total (1) Net 288 143 107 444 42 710 47
Corporate Income Tax (2) Tax year 2008 [102.2% assessed tax as % of provisional tax] 2009 [97.0% assessed tax as % of provisional tax] 2010 [90.2% assessed tax as % of provisional tax] Economic activity 1 Number of taxpayers Net Taxable income (R million) Tax assessed (R million) Number of taxpayers Net Taxable income (R million) Tax assessed (R million) Number of taxpayers Net Taxable income (R million) Tax assessed (R million) 1 Agriculture, forestry and fishing 18 979-11 202 2 183 20 052-13 793 1 908 19 377-16 316 1 821 2 Mining and quarrying 2 488 74 110 26 293 2 443 25 710 13 806 2 245-2 526 6 072 3 Manufacturing 55 679 65 319 36 890 55 833 19 868 28 462 51 747 5 112 23 915 4 Electricity, gas and water 2 095-4 179 734 2 161-9 242 1 166 2 139-18 485 1 334 5 Construction 50 679 7 373 3 981 54 115 7 244 4 614 52 610 6 870 4 892 6 Wholesale and retail trade, catering and accommodation 146 448 34 747 20 555 136 410 14 940 17 584 123 868 20 687 20 258 7 Transport, storage and communications 23 348 14 914 12 700 23 574 3 709 10 537 21 964 12 266 12 666 8 Agencies and other services 52 048 4 879 3 004 49 534 3 856 2 980 40 723 2 118 2 696 9 Financing, insurance, real estate and business services 218 698 77 179 41 595 219 638 46 934 37 815 205 982 25 074 34 666 10 Long term insurance 356 14 706 7 686 338-1 916 4 850 309-1 212 4 590 11 Research and scientific institutes 1 472-289 103 1 523-579 123 1 513-962 116 12 Community, social and personal services 36 612 9 329 4 266 37 565 10 845 4 820 34 445 10 486 4 872 13 Other2 6 784 1 256 643 4 285-133 221 3 032-401 109 Total 615 686 160 631 607 471 128 886 559 954 118 006 Total (1) Net 288 143 107 444 42 710 Total (2) Net positive 303 813 133 107 82 613 Total > 0 taxable income 564 555 456 043 418 560 Total < 0 taxable income -276 412-348 598-375 850 48