Our Minister of Finance Enoch Godongwana will be presenting his first budget speech on Wednesday 23 February 2022. He is presenting this budget in a strained economic environment, impacted by events such as the Covid pandemic as well as the civil unrest last year. The following items are some of the topical matters that we would anticipate will be addressed in the upcoming budget speech:

  • Will the planned reduction in the corporate income tax rate come into effect? This was announced last year, but was set to coincide with the introduction of other revisions to interest limitation rules and a limitation on the use of assessed tax losses.
  • Potential corporate income tax reform, with the possibility of the removal of specific capital depreciation incentives and a corresponding reduction in the corporate income tax rate.
  • Will the VAT rate be retained at 15%? The current rate of VAT is low on a global scale, but a change in this tax has far reaching implications.
  • Possibility of an increase in the rate of withholdings tax on interest, bearing in mind that the current rate of 15% is lower than the dividends withholding tax rate of 20%.
  • Personal income tax tables. We anticipate there should be no increase in the maximum marginal rate of tax, but will need to await details of the adjustments within the tax tables to do a detailed comparison to the inflation rate.
  • Support for state owned enterprises. What will be the extent of ongoing financial support be to our SOE’s?
  • Deemed exit tax on retirement fund on emigration. The previous proposals on this topic were withdrawn, but will there be further focus on revised laws to address it further.

Further news on the developments from the 2022 National Budget will be released later this week.

Neil Hughes

Director: Tax, Johannesburg