On 23 February 2022, South Africa’s Minister of Finance, Mr Enoch Godongwana presented the 2022 Budget.
The tax proposals have been summarized below.
The effective date of these measures have been included or will be specified by the tax amendment acts.
Personal Income Tax
1. Personal Income Tax Brackets
The budget proposes the adjust personal income tax brackets by 4.5%.
The new brackets will be applicable from 1 March 2022.
They will be as follows:
- Up to 226, 000 ZAR – 18%
- 226, 001 ZAR to 353, 100 ZAR – 26%
- 353, 101 ZAR to 488, 700 ZAR – 31%
- 488, 701 ZAR to 641,400 ZAR – 36%
- 641, 401 ZAR to 817, 600 ZAR – 39%
- 817, 601 ZAR to 1731, 601 ZAR – 41%
- Above 1731, 601 ZAR – 45%
2. Increase in the Tax-Free threshold
For the 2023 year of assessment (1 March 2022 to 28 February 2023)
You are liable to pay income tax if you earn more than:
- If you are younger than 65 years, the tax threshold is 91, 250 ZAR
- If you are 65 to below 75 years of age, the tax threshold is 141 250 ZAR.
- For taxpayers aged 75 years and older, this threshold is 157 900 ZAR.
It should be noted that for the 2022 year of assessment (1 March 2021 – 28 February 2022)
The tax threshold was as follows:
- If you are younger than 65 years, 87 300 ZAR
- If you are 65 to below 75 years of age, the tax threshold is 135 150 ZAR.
- For taxpayers aged 75 years and older, this threshold is 151 100 ZAR.
3. Medical tax credits
Medical tax credits will increase from 332 ZAR to 347 ZAR per month for the first two members, and from 224 ZAR to 234 ZAR per month for additional members.
Employment tax incentive
The employment tax incentive will be expanded through a 50% increase in the maximum monthly value to 1500 ZAR.
No increase will be made to the general fuel levy on petrol and diesel for 2022/2023.
There will also be no increase in the Road Accident Fund levy.
Corporate Income Tax
Corporate income tax will be reduced from 28% to 27% for companies with years of assessment ending on or after 31 March 2023.
Alcohol and tobacco
Excise duty on alcohol and tobacco will increase between 4.5 and 6.5%. This measure was applicable as from the budget speech date.
A new tax on vaping products will be introduced of 2.90 ZAR per millilitre. This will be applicable from 1 January 2023.
It was proposed to introduce a new tax on beer powders.
Health promotion levy
The health promotion levy will also be increased from 2.31 cents per gram of sugar.
The carbon tax rate will increase to 144 ZAR. This will be effective from 1 January 2022.
The carbon fuel levy will also increase to 9c per litre for petrol and 10c per litre for diesel. This measure will be applicable from 6 April 2022.