Hon Chairperson, indeed, as the previous speaker, our deputy chairperson, the hon Mr van Rooyen, has indicated, it is a fact that the Rates and Monetary Amounts and Amendment of Revenue Laws Bill is an annual Bill that gives effect to the tax proposals in the Budget. The good news, Minister, is that we acknowledge that there were generous concessions this year.
While National Treasury was indeed generous this year in tax bracket and rates adjustments, especially for small business taxation, in general, there were three main types of taxes where brackets were not adjusted fully for inflation. It is in these thresholds and brackets that several important taxes were not adjusted for inflation. This means that there was bracket creep, or, in real terms, increases in taxes - or if I may put it differently, decreases in the tax breaks for various groups.
If I may, I will give you the example, sir, of personal income tax. Inflation for 2012 was just below 6% but in thresholds it was only adjusted for 3,5%, meaning real tax increases of 2,5%; the turnover tax for micro businesses has not been adjusted since 2009; and taxable income for nominal retirement withdrawals was not adjusted for 2013.
The Bill provides tax relief for individual income taxpayers by adjustments to the personal income tax brackets, partially accommodating for the fiscal drag. That is the position where individuals move into a higher income tax bracket due to inflationary adjustments to their wages and salaries.
The second category is with regard to retirement lump sum benefits. This is a different story completely. The tax tables, although slightly adjusted on an ad hoc basis, have not been adjusted for inflation in 2013. We propose that the schedule should be adjusted annually in the same manner that the normal taxes are adjusted.
The upper thresholds have also not been adjusted - only a single 5% increase since 2009. National Treasury stated no policy reason - especially in the lower threshold groups - why retirees should not be subjected to increasingly harsher tax measures than the general taxpaying population. We have not heard sound reasoning why normal tax rates should be adjusted for inflation but not for the retirement lump sum withdrawal rates.
I think this morning we spoke to Prof Osman Mollagee of PricewaterhouseCoopers and he indicated the importance of savings for the public of South Africa and for them to have the maximum return on their investments.
Turnover tax adjusted for micro businesses has not been adjusted since 2009, thereby excluding a greater number of micro businesses every year. The threshold here is also problematic. It is inadequate, since businesses would have to generate over R108 000 in profit from a R100 million turnover a year. This is, of course, a tax on turnover. The thresholds need to be adjusted annually for inflation.
The DA supports the view that the Tax Review Committee will have a look at this Bill, but, unfortunately, we cannot support this Bill. Thank you. [Time expired.]