The personal tax relief in this budget seems generous at a total of R7,2bn, but the actual individual impact will be symbolic rather than dramatic.
Stanlib's Patrick Mamathuba thinks "it's a bit stingy" and believes consumers would be justified in believing the absolute benefit for them will be fairly immaterial.
But since the Reserve Bank is in tightening mode, Mamathuba supposes Trevor Manuel "doesn't want to go against what the governor is doing and then taxes would have to be increased again". What you will pay Click here for What you will Pay table.
Paul de Chalain, head of tax at PricewaterhouseCoopers (PwC), says: "Every year we have this tax relief' [claim], but look at the figure of R7,2bn - if we were in an environment where inflation was zero, then it would be a real plus."
De Chalain thinks that if you analyse the changes to income taxes this year, they are merely inflationary catch-ups - except for the Road Accident Fund changes, which were substantially above inflation.
The travel allowance, too, showed an increase above inflation in the deductible amount. De Chalain notes that "it is good to see that maintenance and fuel costs are now being considered".
Though this year's figure of R7,2bn is down R1,2bn from the R8,4bn in 2007/2008, it is still better than nothing, particularly in a high inflationary environment, because it "fully compensates for the effects of inflation", said Manuel in his budget speech.
It's worth remembering that the total direct individual tax relief granted in the Manuel era is close to R100bn.
An interesting development is the drive to increase donations to public benefit organisations (PBOs). The Budget review says "it is proposed that employers be allowed to deduct donations by employees to PBOs in determining employees' tax payments".
Rob Stretch, tax director at Ernst & Young, says: "The thing that is quite disappointing is this issue of encouraging savings, then they only increase the interest exemption from R18 000 to R19 000. They need to look at that and put it up to something like R50 000."
A debate is raging around the fringe benefit review for personal usage of laptops and cellphones. Johan Troskie, specialist tax lawyer at Deneys Reitz, says it is an "incentive to encourage productivity - there has been a growing trend for businesses to provide laptops and cellphones so people can work away from the office.
"And there has always been this issue of incidental private use... but they have now said they will disregard [it for the purposes of fringe benefit tax]". However, PwC's De Chalain wonders how this will be quantified.
The increases in tax-free medical aid contributions were also negligible - R530 to R570 (7,6%) for each of the first two beneficiaries and from R320 to R345 (7,8%) for each additional beneficiary.
The tax-free limit for employer-granted dependant bursaries, which are regarded as fringe benefits, increases to R10 000 a year for employees earning up to R100 000 a year (from R3 000 and R60 000).
It is not clear why, in an environment where everything should be done to encourage education and skills development, employees earning more than R100 000 and less than, say, R300 000, should not get the benefit of a tax break.
Though there were no real bonanzas for individuals, De Chalain says "it is good that the budget confirms SA is moving in line with modern global tax reforms, especially for simplification of tax submissions".
Much of the personal relief comes at the lower end of the scale, with precious little comfort for the over taxed middle classes who are under serviced by the state.
