Crunching the numbers: Budget 2017

It is an astounding exercise to go through the numbers behind the annual national budget presented recently and to start to understand what it is that the various tax changes are aimed at achieving.

On 22 February 2017, Finance Minister Pravin Gordhan presented South Africa’s biggest budget yet, providing for budgeted Government expenditure over the 2017/2018 fiscal year of R1.6 trillion (or R1,563,300,000,000!) Of this, by far the most significant portion will be spent towards social services to be delivered in the form of education, healthcare, social protection (grants), and local development and infrastructure: R884bn, or 56.5%, to be exact. A further R198.7 billion is being allocated to defence and public safety, with agriculture and economic affairs receiving R241.6 bn. General administration (departments such as Treasury, Foreign Affairs and the various legislative organs) is to receive R70.7bn of the 2017 budget, while it is further notable that little over 10% is allocated to servicing Government debt.

On the income side, taxes remain Government’s primary source of revenue, and budgeted revenue in tax collections are estimated to be collected as follows:

Description ZAR bn %
Personal income tax 482.1 38.1
Corporate income tax 218.7 17.3
VAT 312.8 24.7
Customs and excise 96.1 7.6
Fuel levies 70.9 5.6
Other 84.9 6.7
Total 1,265.5 100

Direct income taxes, as have been the trend over the recent past, continues to be the major contributor to the Government purse at more than 55% and borne by those individuals economically active.

It was widely reported in the run-up to the budget speech that a shortfall in tax revenue of approximately R28bn would need to be provided for, and that the Minister would need to be creative in meeting this challenge and where he would raise taxes to cover this, especially considering that increased taxes inevitably acts as impediment to economic growth (estimated to reach 2.2% by 2019). The bulk of this additional R28bn to be collected will be received from the raising of the personal income tax and trust tax rate ceiling to 45% (R16.5bn), while the increased dividends tax rate raised from 15% to 20% is expected to raise a further R6.8bn.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)




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IC Marais

Professional experience:

IC Marais is a certified CA (SA) with public sector and private sector technical knowledge based on 5 years’ Public Sector accounting, auditing and financial management experience and 5 years audit, tax and accounting experience. Detailed knowledge of private and public sector accounting and auditing standards (GRAP, IPSAS, IFRS, IAS, ISA) and public sector financial legislation (MFMA, etc.)

He enjoys the outdoors, hunting and fishing.


Professional experience:

In 1995, Schalk started as a trainee at Warner and Newton (which became Moores Rowland in 1997 and then Mazars Moores Rowland in 2007) in Bloemfontein. In 1998, Schalk was appointed as manager at Moores Rowland, where he became a partner in 2003. Schalk received his Postgraduate Certificate in Advanced Taxation in 2006 and in 2009 he received his Certificate in the Administration of Estates.


Professional experience:

Cedric started as a trainee at Warner and Newton (which became Moores Rowland in 1997 and Mazars Moores Rowland in 2007), Bloemfontein, in 1986. After completion of his articles, he joined the Special Investigations Division of the Department of Finance (SA Revenue Services) as a senior inspector from 1990 to 1991.


Professional experience:

Lucha started her career as a tax inspector at the Inland Revenue Department of New Zealand. After this she worked in commerce in Canada, Mexico and the United States.

On her return to South Africa, she completed her CA training contract with us and has been with Newtons ever since. She became a Partner in 2012.

Apart from her CA(SA) qualification she also holds a postgraduate certificate in Advanced Taxation (2005) and has the overall responsibility for training as our Training Officer.