S’ Africa sets new income tax rate for high earners to boost revenue

South Africa’s Finance Minister Pravin Gordhan says the country will introduce a new personal income tax rate for high earners to help rein in the budget deficit.

This will aid improving economic growth in coming years.

Treasury has flagged raising an extra $2 billion through taxes this year, and the new top income tax rate of 45 percent for annual taxable incomes above 1.5 million rand was expected to raise more than half of the amount.

The rest of the amount will come from hikes in dividend withholding tax, fuel taxes and alcohol and tobacco excise duties.

Gordhan says the tax proposal will raise an additional 28 billion rand by comparison with revenue estimates based on full adjustment of personal income tax and excise duties for inflation.