Practitioners knock tax rate hike

Tax practitioners were critical of the Budget tax changes. A director at Werksmans Attorneys expressed disappointment at the creation of what it called ‘an aggressive’ new top tax rate of 45% for individuals earning more than R1.5m. ‘We were expecting higher taxes on the wealthy, but this is a larger increase than we thought reasonable. We hope this is not the start of a trend of very high taxes on wealthier individuals, many of whom are mobile and can choose to live anywhere in the world,’ Doelie Lessing is quoted as saying in a Fin24 report. He said Werksmans is also disappointed at the rise in dividend tax which he said is effectively a penalty on the fruits of investing. ‘We need to encourage saving and investment, not penalise it. The rise in the annual Tax Free Saving Allowance to R33 000 is welcome but it should have been raised even higher to offset higher dividend taxes and further encourage saving.’