Mister Speaker, hon members, before us is the Rates and Monetary Amounts and Amendment of Revenue Laws Bill, 2013. This, basically, in law, now gives you the tax deductions that we announced in the Budget Speech.
As practice and in order to give legislative effect to some of the more pressing tax changes announced in the 2013 annual tax legislation, amendments will be done in phases. This year, there will be three pieces of legislation to provide for the tax changes announced in the 2013 Budget Speech. The first piece of legislation, tabled today, deals with most of the changes in tax rates and monetary amounts. Most of them are already being implemented, but require legislative approval.
The more substantive legislative tax amendments will be incorporated into the annual Taxation Laws Amendment Bill, to be tabled later this year, and the employment incentive Bill. The latter will provide for an incentive to help address some of the difficulties our youth experience in getting that first job that will help to gain the necessary work experience to ensure gainful employment.
In respect of tax relief to individual income tax taxpayers, this amending Bill provides tax relief for individual income tax taxpayers by adjustments to the personal income tax brackets, partially accommodating for fiscal drag. The total relief provided amounts to R7 billion. Although the personal income tax brackets were not fully adjusted for inflation in 2013- 14, it should be noted that over the last decade-and-a-half, personal income tax brackets were adjusted above the annual rates of inflation, thereby, over the medium term, providing both fiscal drag and real income relief.
The monetary amounts of the monthly medical aid tax credits are increased in line with inflation. These monthly tax credits will be increased from R230 to R242 for each of the first two beneficiaries, and from R154 to R162 for each additional beneficiary, with effect from 1 March 2013.
In respect of nonretirement savings, government intends to proceed with the implementation of tax-preferred savings and investment accounts. All returns accrued within these accounts and any withdrawals would be exempt from tax. The account would have an initial annual contribution limit of R30 000 and a lifetime limit of R500 000, to be increased regularly in line with inflation. The new accounts will be introduced by April 2015.
In the meantime, with effect from 1 March 2013, tax-free interest-income annual thresholds will be increased from R33 000 to R34 500 for individuals 65 years and over, and from R22 800 to R23 800 for individuals below 65 years - and most of you qualify for that! These thresholds will not be adjusted for inflation in future years.
In respect of tax relief to small businesses, the Bill provides income tax relief for small businesses. The monetary brackets of the graduated income tax table for small business corporations were increased and an additional 21% income tax bracket is introduced. In addition, the monetary annual turnover, or sales, amount for a qualifying small business corporation is increased from R14 million to R20 million per annum.
In respect of indirect taxes, the Bill also provides for increases in the monetary amounts of various indirect taxes. Tobacco excise duties are increased between 5,8% and 10%, and excise duties on alcoholic beverages are increased between 5,7% and 10%.
Other indirect taxes that were increased by way of amendments to the Schedules to the Customs and Excise Act, and not included in this Bill, are the following: the general fuel levy and Road Accident Fund levy were increased by 15c/l and 8c/l, respectively, with effect from 3 April 2013; the motor vehicle CO2 emissions tax for passenger vehicles was increased from R75 to R90 for every gram of emission per kilometer above 120g CO2 /km and, in the case of double cabs, from R100 to R125 in excess of 175g CO2/km, again, with effect from 1 April 2013; the levy on plastic shopping bags has been at 4c per bag since 2009, and this was increased to 6c per bag as from 1 April 2013; and similarly, the levy on incandescent light bulbs was increased from R3 to R4 per bulb as from 1 April 2013.
In respect of the revenue outlook in relation to the current economic growth that we are experiencing, clearly, our economy today is facing more difficulties than we anticipated. This is partly because of the very uncertain and volatile environment that we are experiencing globally, which could become worse when the Chairman of the Federal Reserve of the United States addresses the press, I think, and perhaps their Congress on Wednesday this week. There, he might indicate further exactly how the US Federal Reserve will start to taper off what they call "quantitative easing". It is likely that, if the markets do not like what he is saying, or interpret what he is saying in a particular way, that could introduce shock waves very similar to what we experienced two weeks ago in the financial markets around the world, as well. So, let us prepare ourselves for that. All of these uncertainties actually introduce uncertainty around the revenue picture.
I hereby table the Rates and Monetary Amounts and Amendment of Revenue Laws Bill, 2013. Thank you. [Applause.]
I thank the hon the Minister. Hon Minister, any news about tax relief is welcome news. I was prepared to give you more time to expand on the tax relief measures. [Laughter.]
Bill referred to the Standing Committee on Finance for consideration and report.