Minister of Finance, Mr Enoch Godongwana, presented the Budget speech to the nation on Wednesday 21 February 2024. His Budget proposals included:
1. Increase in Tax for Individuals
Personal income tax is increased by not adjusting the tax brackets, rebates and medical tax credits.
2. Global Minimum Corporate Tax
An effective tax rate of at least 15% is to be imposed on multinational corporations with an annual revenue exceeding €750 million.
3. Alternative Dispute Resolution Proceedings
The dispute resolution process will be reviewed to improve efficiency, which may include allowing alternative dispute resolution proceedings at the objection phase of a tax dispute.
4. Local Electric Vehicle Production Incentive
As of 1 March 2026, manufacturers will be able to claim 150% of qualifying investment on production capacity for electric and hydrogen-powered vehicles in the first year of investment.
5. Solar Panel Rebate
The individual who pays for new and unused solar panels is eligible for a rebate of 25% of the cost (excluding installation, inverters and batteries), capped at R15 000 per individual. The panels must be brought into use for the first time in the period 1 March 2023 to 29 February 2024.
6. Two-Pot Retirement System
As from 1 September 2024, retirement funds will be subject to the new two-pot system which aims to minimise early withdrawals, while retaining the principle of exempting contributions and growth, but taxing withdrawals. The “retirement pot” cannot be accessed before retirement. The “savings pot” can be accessed with a single taxable withdrawal in any 12 month period, subject to tax at marginal rates. One-third of future total contribution goes to the “savings pot” and the balance to the “retirement pot”. The fund balance as at 31 August 2024 will remain in the “vested pot”. Withdrawals will be subject to tax according to the relevant lump sum table. Members may transfer the lesser of 10% of the fund balance or R30 000 from the “vested pot” to the “savings pot” as initial seed funding.