The Budget Speech 2013, by Finance Minister Pravine Gordhan, was presented on the back drop of difficult international economic times. South Africa needs to prove, to the international community, that it has sound business practices and the ability to carry them out over the medium to long term.
With unsettled workers in many industries and the incessant call for nationalisation over the past year, the international community has had concerns about investing in long term capital investments in South Africa. This has hampered job growth and caused further unrest.
National Development Plan (NDP)
From the outset of his speech Mr Ghordon reffered to the National Development Plan (NDP) as the means of an increased GDP and tried to allay fears of nationalisation with much emphasis on the need of the private sector.
There will be a reshuffle of expenditure to fall in line with the NDP thus preventing the need to increase overall taxes.
A strong warning was issued to government departments to implement infrastructure plans and spend the funds allocated to these development projects. At the same time mention was made that any new plans will have to be two years old before being considered. Is this a way of delaying further development for two years to save funds?
Does South Africa have a plan, the international community has asked? The Finance Minister has answered yes, the NDP. Heavy emphasis was placed on the need for the private sector in our economy. The NDP and the economy needs the private sector to succeed.
Small Business Incentives
Small business incentives have been improved. An additional bracket has been added. 0 – 67,111 0%67,112 – 365,000 7%365,001 – 550,000 20,852 + 21% of taxable income above 365,000550,000 + 59,702 + 28% of amounts above 55,0000
Employment tax incentives will be tabled this year before parliament for implementation this year. A drive is on to grow private business in South Africa and create more jobs.
Individuals Tax Tables have been adjusted as follows:Taxable Income (R) Rate of Tax (R)0 – 165 600 18% of taxable income165 601 – 258 750 29 808 + 25% of taxable income above 165 600258 751 – 358 110 53 096 + 30% of taxable income above 258 750358 111 – 500 940 82 904 + 35% of taxable income above 358 110500 941 – 638 600 132 894 + 38% of taxable income above 500 940638 601 and above 185 205 + 40% of taxable income above 638 600
Rebates of Tax
Primary R12 080
Secondary (Persons 65 and older) R6 750
Tertiary (Persons 75 and older) R2 250
Age Tax Threshold
Below age 65 R67 111
Age 65 to below 75 R104 611
Age 75 and over R117 111
The private sector plays an important role in stabilising and growing the South African economy. As entrepreneurs we need to grow our business and be confident about our economy. The best time to develop a business is when the economy is in a slow down. Interest rates are low and poorly run business’ are failing. Entrepreneurs with integrity and good business practice have the opportunity to grow their market in these exciting times in South Africa and the developing Africa. Be encouraged to grow and have your own Business Development Plan (BDP). Let us know if you need help developing your BDP.