The 2021 budget speech, unlike its predecessors, have definitely enjoyed a watchful eye.
Overall, no material changes have occurred, the below are therefore some highlights from our side.
- 5% increase in income tax, tax brackets and primary rebates.
- For now, the previously proposed increases for the next 4 years have been put on hold.
- The corporate income tax rate will be lowered to 27% for companies with years of assessment commencing on or after 1 April 2022. This will be done alongside a broadening of the corporate income tax base by limiting interest deductions and assessed losses.
- The Section 12J tax incentive, introduced in 2008, will not be extended beyond its sunset date at end June this year.
- The country provided “one of the largest fiscal responses to the pandemic among developing countries”. This will continue in the current fiscal year including a mechanism to fund vaccines, which are expected to be rolled out in the second half of the year.
Notably, the economic pressure continues to mount and therefore, it is critical for business to respond in responsible ways and to be conservative in their commitments. More than ever, it is important to strategies and implement measures that would ensure that the entity is able to succeed. This includes financial and legal controls and structures.
Contact SchoemanLaw for assistance to strengthen your business legal controls, debt collection, commercial and technology law advice.