Parliament looks at tax relief

Parliament is looking to change taxation laws to push South African economic growth, says finance minister Pravin Gordhan.

Speaking at the debate on National Treasury’s Taxation Laws Amendment Bills, 2011  in Parliament, Gordhan defined the Bills as being a balanced package.

“These Bills contain many fiscal measures that seek to facilitate growth by alleviating the burden on ordinary working citizens and by removing tax blockages that impede legitimate commercial goals.

“These Bills also take aim at aggressive tax practices, such as the (mis)use of section 45, that seek to shift large amounts of revenues indirectly from the fiscus for the benefit of a few members of the corporate elite,” he explained.

Among the features of the Bills is the provision of R8.1 million in personal income tax relief for the benefit of ordinary people. As part of this package most people can now earn R59 750 a year tax-free while elderly people aged 65 to 74 can receive R93 150 tax-free. Those who are 75 and above can receive R104 261 tax-free.

“All brackets will be shifted upwards with the top marginal rate of 40 percent applying only to those persons earning over R580 000.”

The Bills also include changes to medical credits – currently the provision of tax deductions for medical aid scheme contributions undermines tax fairness with rich taxpayers receiving more relief than lower income taxpayers.

“In order to remedy this situation, instead of providing deductions, the revised system offers credits,” said Gordhan. The credits provide 30 cents relief to the rand regardless of a person’s income level. - BuaNews