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Taxpayers who carry on a trade are entitled to deduct their expenses from their income for tax purposes. However, such deductions will only be permitted if they have actually been incurred during the year of assessment in question.
Many pundits predicted that the Minister’s hands were tied and he would have no choice but to increase the VAT rate or at least tax rates across the board. Instead, the Minister afforded some relief to taxpayers with an above-inflation increase in the personal income tax brackets and rebates.
The spirited Budget Speech given by Minister Tito Mboweni this Wednesday may have given many taxpayers a sense of cold comfort in otherwise tumultuous economic conditions in South Africa.