The Treasury has proposed changes to tax thresholds and limits — some of which have been in place for many years, if not decades — including an increase in the annual limit for tax-free savings from R36,000 to R46,000.
To assist small businesses, the VAT compulsory registration threshold and the annual turnover limit for the turnover tax have both been increased from R1m to R2.3m and the voluntary VAT registration threshold from R50,000 to R120,000. The VAT registration thresholds will be effective from April 1, 2026, while the other thresholds will be effective from March 1 2026.
The thresholds for turnover tax for micro businesses have also been adjusted, with the first R600,000 being exempt from tax, compared to the existing R335,000.
Capital gains tax (CGT) thresholds will also change, with the CGT exclusion for small business asset disposal increasing from R10m to R15m, the exclusion amount on the disposal of small businesses when a person is over 55 years from R1.8m to R2.7m, the exclusion on death from R300,000 to R440,000, the exclusion related to the disposal of a primary residence from R2m to R3m and the annual exclusion from R40,000 to R50,000.
Apart from the change to the tax-free investment annual limit, other changes affecting savings and retirement have been made. The retirement fund contribution deduction limit will increase from R350,000 to R430,000, the retirement interest de minimis threshold for annuitisation from R247,500 to R360,000 and the living annuity commutation from R125,000 to R150,000.
On donations tax, the exemption for donations made by entities increases from R10,000 to R20,000 and by individuals from R100,000 to R150,000.
A whole host of proposals are made regarding tax-exempt employment benefits, such as for bursaries and scholarships, employee loans and awards for bravery and long service.
The revenue expectation from the 2026/27 implementation of the global minimum tax rules has been reduced to R2bn from the previous estimate of R8bn.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.