2. Taxation
2.1 Income tax on individuals
Government proposes no inflationary adjustments to personal income tax brackets and rebates.
Comment: The fact that personal income tax brackets will not be adjusted for inflation increases the inflationary pressure on households. Some individuals could find themselves in a higher tax bracket for the coming year of assessment after having received their annual salary increases.
2.2 Income tax on trusts
Income tax on trusts remains the same.
2.3 Reinstating the exemption for child maintenance payments funded from after-tax income
Child maintenance payments, except in the case of deductions from retirement fund benefits, are made using after-tax income and paid to the parent or guardian living with the child. The paying party receives no tax deduction or relief for these payments, while the recipient is taxed on the maintenance received.
Since these payments are intended to fulfil the fundamental obligation of supporting a child, taxing them in the hands of the recipient requires reconsideration to better align with government’s social policy objectives. It is proposed that amendments be made to exclude child maintenance payments from the recipient’s taxable income to restore the original policy intent.
2.4 Trustee’s role as the representative taxpayer of the pre-insolvent person
An amendment is proposed to confirm that the liability of a trustee of an insolvent estate, in their representative capacity, also extends to any income received or accrued to the insolvent person prior to the sequestration of the estate.
2.5 Capital Gains Tax
The taxable capital gain for individuals and trusts remains unchanged.
2.6 Company Tax, Small Business Income Tax and Micro-business Turnover Tax
Company tax rates remain unchanged at 27% and the income tax table for small businesses, as well as the tax table relating to turnover tax for micro-businesses, are unchanged for the coming year of assessment.
2.7 Collective Investment Scheme (CIS) taxation
A discussion paper on CIS taxation made three main proposals: make CIS fully tax-transparent, provide a threshold for CIS, and remove hedge funds from the framework. Government acknowledges the administrative concerns raised in respect of the fully tax-transparent proposal and confirms that it does not intend to tax all CIS returns as revenue. Consultations will continue in 2025.
2.8 The following remains unchanged
- Dividends tax on both local and foreign dividends
- Donations Tax
- Estate Duty
- Dividends Withholding Tax
- Donations to Public Benefit Organisations
2.9 Medical tax credits
No changes to medical tax credits are proposed – these will remain at R364 per month for the first two beneficiaries and at R246 per month for the remaining beneficiaries.
2.10 Adjustment of transfer duty
The monetary thresholds for transfer duties will be adjusted by 10% to compensate for inflation. The transfer duty tax rates will remain unchanged.
The adjusted values are indicated in the below table and are to become effective on 1 April 2025.
| 2024/25 | 2025/26 |
| Property value (R) | Rates of Tax | Property value (R) | Rates of Tax |
| R0 – R1 100 000 | 0% of property value | R0 – R1 210 000 | 0% of property value |
| R1 100 001 – R1 512 500 | 3% of property value above R1 100 000 | R1 210 001 – R1 663 800 | 3% of property value above R1 210 000 |
| R1 512 501 – R2 117 500 | R12 375 + 6% of property value above R1 512 500 | R1 663 801 – R2 329 300 | R13 614 + 6% of property value above R1 663 800 |
| R2 117 501 – R2 722 500 | R48 675 + 8% of property value above R2 117 501 | R2 329 301 – R2 994 800 | R53 544 + 8% of property value above R2 329 300 |
| R2 722 501 – R12 100 000 | R97 075 + 11% of property value above R2 722 501 | R2 994 801 – R13 310 000 | R106 784 + 11% of property value above R2 994 800 |
| R12 100 001 and above | R1 128 600 + 13% of property value above R12 100 000 | R13 310 001 and above | R1 241 456 + 13% of property value above R13 310 000 |
2.11 Interest exemptions
No changes to interest exemptions are proposed.
2.12 Subsistence allowances and advances
Where the recipient is obliged to spend at least one night away from his or her usual place of residence on business, and the accommodation to which that allowance or advance relates is in the Republic of South Africa, and the allowance or advance is granted to pay for:
- Meals and incidental costs, an amount of R570 is deemed to have been expended per day; or
- Incidental costs only, an amount of R176 is deemed to have been expended per day
Where the accommodation to which that allowance or advance relates is outside the Republic of South Africa, a specific amount per country is deemed to have been expended. Details of these amounts are published on the SARS website (www.sars.gov.za), under Legal Counsel – Secondary Legislation – Income Tax Notices 2025 – Notice 4458, published on 1 March 2024.
Where the recipient is, by reason of the duties of his or her office or employment, obliged to spend a part of a day away from his or her usual place of work or employment, a reimbursement or advance for expenditure actually incurred by the recipient is exempt if the recipient is allowed by his or her principal to incur expenditure on meals and other incidental costs for that part of the day, and the amount of the reimbursement does not exceed R176.
2.13 Travel allowance
Travel allowance rates per kilometre, which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are determined using the following table:
| Value of the Vehicle (including VAT) (R) | Fixed cost (R p.a.) | Fuel cost (c/km) | Maintenance cost (c/km) |
| 0 – 100 000 | 33 940 | 146.7 | 47.4 |
| 100 001 – 200 000 | 60 688 | 163.8 | 59.3 |
| 200 001 – 300 000 | 87 497 | 177.9 | 65.4 |
| 300 001 – 400 000 | 111 273 | 191.4 | 71.4 |
| 400 001 – 500 000 | 135 048 | 204.8 | 83.9 |
| 500 001 – 600 000 | 159 934 | 234.9 | 98.5 |
| 600 001 – 700 000 | 184 867 | 238.9 | 110.5 |
| 700 001 – 800 000 | 211 121 | 242.9 | 122.5 |
| Exceeding 800 000 | 211 121 | 242.9 | 122.5 |
- 80% of the travel allowance must be included in the employee’s remuneration for the purposes of calculating PAYE. The percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year will be for business purposes
- No fuel cost may be claimed if the employee has not borne the full cost of fuel used in the vehicle, and no maintenance cost may be claimed if the employee has not borne the full cost of maintaining the vehicle (e.g. if the vehicle is covered by a maintenance plan)
- The fixed cost must be reduced on a pro-rata basis if the vehicle is not used for business purposes for a full year
- The actual distance travelled during a tax year, and the distance travelled for business purposes, substantiated by a logbook, are used to determine the costs that may be claimed against a travel allowance
