Consumers set to shoulder higher tax burden

PRETORIA - Consumers' portion of the budget revenue is set to increase over the next four years, while the corporate tax portion declines. Tax from trade won't recover till after 2012/13.

"To ensure fairness and equity in the tax system, the South African Revenue Service is increasing penalties for those who do not pay their fair share of taxes", says Treasury.

It doesn't look like Treasury expects to increase the consumer tax rates. The relatively higher burden on consumers may come from either faster growth in that segment of the tax base or from fiscal drag.

Fiscal drag is where individuals' incomes rise to meet inflation, thus ending up paying more tax. This happens if personal income tax brackets rise slower than inflation.

Currently consumers make up around 31% of the budget revenue through "personal income tax". This is projected to rise to over 33% in 2012/13, with corporate income tax dropping from over 21% to 19.7% in 2012/13.

Consumers will also see some pressure in value added tax payments, increasing from around 21% to 21.6% of the revenue by 2012/13.

Customs (-31% from budgeted) and excises (-7% from budgeted) duty's have suffered drops that are only expected to be recovered after 2012/13.

The expected revenue from the fuel levy will drop from 4.35% to 3.84% of budget revenue by 2012/13. This probably doesn't imply a decrease in the levy itself, just a slower rate of increase versus the budget itself.

Payments to the Southern African Customs Union are expected to decrease from over 4% (R28bn) of the budget to 2.4% (R22.5bn) by 2012/13. Treasury cites lower imports as the reason for the decline.

Treasury also expects mineral royalties to start rolling, making up around 0.5% of the budget revenue by 2011/13.

Write to Chris Blaine: chris@moneyweb.co.za

To discover more about these and other tax changes visit www.moneywebtax.co.za and click on the Tax Update Seminar 2009

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I hate the idea of big penalties for late returns SARS is going to catch the inefficient, the sick and the aged. The crooks will just adapt and hire a new account. SARS was doing so well until this dark moment of rabid penalties. The government has already got me taking time in place of profit in my . .more business. What next? Increase prosumption to drop the risk of earnings being arbitrally fined for some petty offence. Prosumption means working directly for yoursellf as building your own home, fit your own cupboards, service your own car, grow your own vegetables and a host of other things you can do several steps back from the finished article. It is a way of turning your time into tax free wealth. . .less by Free the Rest on October 27 2009, 19:25 Find this comment inappropriate? Report it

Well I suppose someone has to pay for the lekgotla's and Range rovers by omg on October 27 2009, 22:29 Find this comment inappropriate? Report it

Big penalties As Free the Rest said, this will catch the old, infirm and inefficient ! That is why this is so unfair. Sars knows that fairness is necessary to solicit public support, which by and large SARS has enjoyed up to now. These penaltries will change that . .more support to active antagonism. Know that when a person is financially crippled by these ridiculous penalties , that the next person could be you ! You may never financially recover ! In the context of extremely complex legislation where errors can be made, these fines are; frightening, unfair, unjustified , open to corrupt prsactises by individuals within SARS, and simply immoral! . .less by Paul on October 28 2009, 08:39 Find this comment inappropriate? Report it

range rovers t is BMW s and Audi s now-Just look at Trevours latest buy. And that was just his Joburg car. by spark on October 28 2009, 08:52 Find this comment inappropriate? Report it

It's like a business... The higher you make your prices (taxes) the less demand there will be for your product (RSA)... If only they could apply the revenues (Taxes) they collect for improving the product (RSA), less people would mind being taxed more- but alas- it is applied to . .more fullfill the the greed of the few corrupt terrorists who hold office, living in a warped state of reality and believing they can carry on raping the nation for ever, and that somehow, no one will notice. Building a house of cards in a windy city...but as always....those who laugh last... . .less by Johnny V on October 28 2009, 11:19 Find this comment inappropriate? Report it

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