2017 Budget Speech summary

2017-03-16 06:02

IN his 2017 budget speech on February 22, some of the key points of which are summarised below, the South African Minister of Finance, Pravin Gordhan, indicated that South Africa needs to raise an additional R28 billion in tax revenues and reduce spending by a total of R26 billion over the next two years. The increase in revenue will be funded mainly by the following measures:

•A new maximum marginal income tax rate of 45% for those with taxable income over R1.5 million per annum (an increase from the current maximum rate of 41%).

•An increase in the dividend withholding tax rate from 15% to 20% (effective February 22). The exemption and rates for foreign dividends will also be adjusted in line with the new rate, effective for years of assessment commencing on or after 1 March 2017.

•An increase of 30 cents per litre in the general fuel levy and nine cents per litre in the Road Accident Fund levy.

•Increases in excise duties for alcohol and tobacco of between 6% and 10%.

•No change to the value-added tax (VAT) rate of 14%.

•An increase in the transfer duty-free threshold for residential properties from the current R750 000-00 to R900 000-00.

•No increase in the corporate tax rate of 28% (which is considered to be higher than the Organisation for Economic Co-operation and Development average of 25%).

•An increase in the income tax rate applicable to income retained by trust from 41% to 45%.

•An increase in the withholding tax on immovable property sales by non-residents from 5% to 7.5% for individuals, 7.5% to 10% for companies and 10% to 15% for trusts.


Following the introduction of section 7C to the Income Tax Act, 1962 (low or no-interest loans to trusts), it is proposed that the anti-avoidance rule will be extended to cover low or interest-free loans to companies owned by trust (as opposed to the trust directly). However, this anti-avoidance rule should apply only to trusts used for estate planning and not, for example, top employee share scheme trusts and certain trading trusts (the existing section 7C does contain a number of carve-outs).

This article is an excerpt from Legal Times, March 3.

You could contact me on 083 399 3905, my office on 032-944 3051 or e-mail me on juggieg@telkomsa.net for an appointment or further information and any other financial advice.


The information is only intended to be of a general nature and should not be relied upon by any part without obtaining full details from a licenced financial service provider.

Minister of Finance, Pravin Gordhan, indicated that South Africa needs to raise an additional R28 billion in tax revenues and reduce spending by a total of R26 billion over the next two years

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.