The hardest thing to understand in the world is income tax - Albert Einstein
Whether Albert Einstein really made this statement is rather unclear - although funny, it sure is understandable for a physicist to not really being interested in taxes. For most of us though, we should make the effort to understand how our taxes are being utilized by our Government.
Personal Income Taxes
Personal income taxes, while existing all around the world, are and have been universally disliked, with one aspect or another constantly being challenged in court. Despite the complaints and challenges, income tax is the main source of revenue for our Government. As Congress deals with the escalating annual deficits and national debt, it has reviewed and amended our country’s current tax structures to better fit the needs of the future.
Taxes are as old as civilization itself. Kings and governments have extracted tributes from their subjects or citizens since the dawn of civilization in the form of taxes, tariffs, and fees. Taxes were originally collected in the form of produce, livestock, or free labor where one would maintain roads, irrigation canals, perform army duty and mining, or construct buildings and even temples. Subjects who did not pay were imprisoned or even executed to set an example for other possible resisters - No wonder we dread the thought of taxation. Thanks to the appearance and widespread use of currency don't only finance trade, but tax collection is also much easier, as collectors no longer have to contend with physical property or manage labor as forms of payment. Thank goodness.
How will the new income tax changes affect you?
In light of the 2016 Budget Speech, and the recent tax amendments that came into effect on the 1st of March, there has been some forward progress in simplifying things. With special focus on the taxation structures of retirement, provident, and pension funds. Here are two very informative articles on the latest tax changes: T-day and what it means for your tax refunds and How will the South African tax amendments impact you.
Focusing specifically on income tax changes, the 2016 Budget has seen some changes to personal income tax, including adjustments to the three lower taxable income tax brackets and the primary rebate to provide some relief for lower income individuals from the effect of inflation. The amount an individual can earn before being required to pay tax has been adjusted for the tax year that runs from 1 March 2016 to 28 February 2017 and you can view that here.
The Key Takeaway
Rather than bogging down financially in 2016, why not make it your best year yet by increasing your income and placing your focus on educating yourself regarding your knowledge of your taxes – here’s a nifty tool from TaxTim that will help you with income tax changes. To make 2016 a great year for you financially, practice the art of proper budgeting and remember to cut unnecessary expenses.
Fincheck wishes you all the best for 2016 and here’s to your healthy loans!
fincheck
