THE 2012-13 budget may well be known as the Robin Hood of budgets, said Marteen Michau, from Sanlam Private Investments, with the super-rich unfortunately receiving special attention. Tax experts warned some of the proposals on retirement savings could even be seen as disincentives to save in institutionalised retirement funding vehicles.
Gerald Seegers, director at PwC, said for those seeking to accumulate funds for retirement, the introduction of pension capping will come as a serious blow.
"Although the tax-deductible limit has increased to 22,5%, the annual tax-deductible retirement contribution will be limited to R250000 a year for individuals under 45 and R300000 for individuals over 45."
Wendy Gardner, tax director at Ernst & Young, said reaching 45 now has a new significance.
"Getting older means you get a higher capped deduction to your retirement fund. At first glance the caps look generous, but why have a cap if we want to encourage savings?"
Ms Gardner said the proposals for tax-preferred savings vehicles are encouraging a savings culture, similar to efforts in the UK.
"This proposal will spawn a new industry in savings vehicles as the tax savings look meaningful, with a life-time limit of R500000," she said.
She said t he steady march in stealth taxes on high net-worth individuals continues, referring to the increase in the rate of capital gains tax.
"The medical aid tax credit system also means high net-worth individuals will lose the opportunity of receiving a deduction for medical aid contributions at a higher tax rate," she said.
Alan Seccombe, tax partner at PwC, says proposed changes to the tax treatment of medical aid contributions for people with disabled dependants will be a blow.
"It is enough of a struggle to have a handicapped child, particularly where that child requires significant medical support well in excess of any normal level of expenditure. In the past these costs were fully tax deductible."
He said with changes coming into effect in March 2014 people with a higher income who received a deduction of R40000 on medical costs of R100000 a year will receive less than R17000 with the tax credit system.