Budget 2023

/ February 2023 / By

Herewith a short summary of some of the tax proposals announced by the Minister of Finance, Mr Enoch Godongwana in his budget on 22 February 2023.

As far as income tax is concerned, these proposals are applicable to the 2024 tax year, i.e. year ending 29 February 2024 for natural persons. Amounts shown in brackets refer to the previous year.

Please note that this is just a summary, and are proposals made by the Minister. The final legislation may differ from these proposals.
>> Click here to download Annexure tables A to D.


Personal tax : Individuals (See Annexure A)

  • Lowest tax rate of 18% applicable on taxable income up to R237 100 (R226 000)
  • Marginal rate at 45% on taxable income above R1 817 000 (R1 731 600)
  • Rebate under 65 years of age – R17 235 (R16 425)
    65 years and older – R26 679 (R25 425)
    75 years and older – R29 824 (R28 422)
  • Interest exemption under 65 years of age – R23 800 (R23 800) (unchanged)
    65 years and older – R34 500 (R34 500) (unchanged)
  • Tax threshold – R95 750 (R91 250)
    65 years and older – R148 217 (R141 250)
    75 years and older – R165 689 (R157 900)
  • Medical fund contributions qualify for medical tax credits per year of R4 368 (R4 164) per person for the first two members and R2 952 (R2 808) per person for each additional member
  • Effective tax rebate in respect of medical costs and fund contributions (unchanged):
    25% of cost
    33.3% of cost for person older than 65 years or in case of disability
  • Retirement fund contributions deductible: 27.5% of taxable income, maximum R350 000 per year (unchanged)
  • Tax brackets in respect of lump sum benefits on retirement changed (see Annexure B)

Transfer Duty

From 1 March 2023:
R0 – R1 100 000 : Nil
R1 100 001 to R1 512 500 : 3% above R1 100 000
R1 512 501 to R2 117 500 : R12 375 + 6% above R1 512 500
R1 117 501 to R2 722 500 : R48 675 + 8% above R2 117 500
R2 722 501 to R12 100 000 : R97 075 + 11% above R2 722 500
Above R12 100 001 : R1 128 600 + 13% above R12 100 000

To 28 February 2023:
R0 – R1 000 000 : Nil
R1 000 001 to R1 375 000 : 3% above R1 000 000
R1 375 001 to R1 925 000 : R11 250 + 6% above R1 375 000
R1 925 001 to R2 475 000 : R44 250 + 8% above R1 1925 000
R2 475 001 to R11 000 000 : R88 250 + 11% above R2 475 000
Above R11 000 001 : R1 026 000 + 13% above R11 000 000

Donations Tax (unchanged)

  • Exempt up to R100 000 p.a. for natural persons
  • Donations tax payable by donor at 20% on the cumulative value of donations up to R30 million per tax year
  • Donations tax payable by donor at 25% on the cumulative value of donations exceeding R30 million per tax year

Estate Duty (unchanged)

  • Tax rate:
    20% on the dutiable value of the first R30 million
    25% on the dutiable value above R30 million
  • Basic deduction : R3,5 million
  • Bequests to spouse remains exempt from estate duty
  • In case of a married couple, the survivor has an exemption of R7 million less so much of the exemption utilised by the first-dying

Capital Gains Tax (unchanged)
Capital gains tax inclusion rates:

  • Individuals : 40%
  • Companies : 80%
  • Trusts : 80%

Exclusions for individuals:

  • Annual exclusion : R40 000
  • Exclusion on death : R300 000
  • Primary residence : R2 000 000
  • Small business exclusion [assets up to R10 million] : R1 800 000

VAT (unchanged)

  • Rate : 15%
  • Compulsory VAT registration if turnover more than R1 million per year

Trusts (unchanged)

  • Income tax rate : 45%
  • Conduit principle remains

Other announcements

  • Tax rate for company unchanged at 27% for years of assessment ending on or after 31 March 2023.
  • Dividend withholding tax rate unchanged at 20%
  • Turnover tax for micro business unchanged (Annexure C)
  • Tax rate for small businesses amended slightly (Annexure D)
  • Official interest rate on fringe benefits and loans to a trust: repo +1 (currently 7.25% p.a. repo plus 1% point = 8.25% p.a.)
  • A tax rebate for rooftop solar is proposed. It is only applicable to individuals. 25% of the cost of solar panels installed between 1 March 2023 and 29 February 2024 can be used to offset personal income tax, up to a maximum of R15 000 per person.

Courtesy of Len Steenkamp – Pieter Steenkamp (Pty) Ltd – Tax and Estate Specialist