The government has made a new income tax law. From 1 April 1984 workers will pay a new kind of tax. The government will tax people in a different way. All workers – black and white – will now pay tax under the same law.
Since 1970 africans paid taxes under one law. Indians, coloureds and whites paid taxes under another law. Under the old law african workers paid taxes every month. Every month the bosses took part of the workers wages and sent this money to the government. Not all workers paid the same tax. If a worker’s wages went up, then his or her tax also went up. This kind of tax is called “Pay As You Earn” (PAYE).
Under this old law men and women with the same wages paid the same tax. They did not pay less tax if they had wives and children. Their bosses took money for tax every month and that was all. They never heard anything more from the government about their tax.
Under the new law bosses will still take some of the workers wages every month. They will send this money or tax to the government every month. So workers will still pay P. A. Y. E (Pay As You Earn). But the tax will not be the same for all workers. Men with wives and children will pay less tax. But single people who are not married and married women will pay more tax than married men – even if they get the same wages.
Workers will pay tax every month. But that is not all – every year in February all men and all single women must fill in a form called a tax return. Married women do not have to fill in this form.
On this form workers must say many things – like how much money they earned in the year and how many wives and children they look after. Then the government works our the tax for the year again. Then sometimes workers will get some money back from the government. But sometimes workers will pay more tax to the government every year.
This story will only tell you how workers pay tax every month under the new law. In the next few months Learn and Teach will write a story about how to fill in the income tax return every year in February.
Under the new law the monthly tax is different for different groups of people. The new law puts people into three main groups. These groups are:
Single Persons (men & women).
Look at the charts below in the story. They will show how much tax each group must pay under the new law. The charts also show how much each group paid under the old law.
1. SINGLE PERSONS.
The new law says “Single Persons” are men and women who are not married. “Single Persons” are also men and women who are divorced
From this chart you can see that most single people with no kids will pay more tax. But most single people with kids will pay less tax. The more kids you have the less tax you pay. The income tax law says kids are all people under 18.
For example: Thami Monareng gets R350 every month. He is not married and he has two children. Look at the chart. Under the old law Thami paid R7.20 tax every month. Under the new he will pay no tax each month.
For example. Lydia Masia gets R400 every month. She is divorced and has one child, Under the old law Lydia paid R11.20 tax every month. Urider the new law Lydia will pay R4.40 tax every month.
For example; Themba Mazibuko gets R500 every month. He is not married and he has no children. Under the old law Themba paid R20.82 each month. Under the new law he will pay R28.80 each month.
If you have more than three kids check with your boss how much you must pay.
2 MARRIED PERSONS.
“Married Persons” is a strange name for a lot of different people. Under the new’ law married persons are:
A man who is married by custom or by law. (BUT NOT WOMEN WHO ARE MARRIED)
Widowers (A man whose wife has died) and widows (a woman whose husband has died)
A man or woman who IS not married but who looks after kids mostly from their own wages.
From this chart you can see that most “married persons” will pay less tax.
If you have more than four children you will pay even less tax. Check how much this tax is with your boss.
For example: Susan Mthethwa gets R300 every month. Her husband is dead and she has three children. Under the old law she paid R4.34 tax each month. Under the new law she will pay no tax each month.
For example. Mandla Ndlovu gets R700 every month. He is married and has four children. Under the old law, Mandla paid R45.04 tax every month. Under the new law Mandla will pay R6.71 tax each month.
If a man has more than one wife then he can claim for children of all his wives.
3. MARRIED WOMEN
The law says married women’ are women who are married by custom or by law. But married women are not called “married persons” under the new tax law.
So married women cannot pay less tax because they look after children.
From this chart you can see that married women will pay much more tax under the new law, They won’t pay less tax because they look after children.
For example: Maria Mofokeng gets R250 every month. She is married with three children. Under the old law she paid R 1.94 tax each month. Under the new law Maria will pay R 11.42 tax each month.
BUT REMEMBER SOMETHING VERY IMPORTANT. MARRIED WOMEN DO NOT PAY TAX AS “MARRIED PERSONS”. BUT IF A WOMAN’S HUSBAND GETS VERY LITTLE MONEY OR IF A WOMAN’S HUSBAND HAS NO JOB, THEN THE WOMAN CAN ASK TO PAY TAX AS A “MARRIED PERSON”. THEN SHE WILL PAY LESS TAX. WOMEN MUST TELL THEI R BOSSES ABOUT THIS. THEY MUST ASK THE BOSS TO WRITE TO THE TAX MAN AND ASK HIM TO TAX THE WOMAN AS A ‘MARRIED PERSON.”
For example. Teboho Nkosi gets R300 a month. She is married with three children. Her husband has no job. Under the old law Teboho paid R4. 34 tax every month. Under the new law she must pay R 16.42 tax each month. Under the new law Teboho is not called a “married person”. But she can ask to pay tax as a “married person” – because her husband has no job. She must ask her boss to do that for her. Then she will pay no tax.
POINTS TO REMEMBER.
The new tax law is very difficuIt. So workers must talk to their bosses if they do not understand the law.
Many married women can ask to pay tax as “married persons”. Then they will pay less tax.
All workers must tell their bosses if they are married and how many chiIdren they have. They must write this information on a form. The form is called an IRP 2. This is important because men with more children pay less tax. Bosses must take off the correct tax for each worker.
Every year in February all “married persons” and “single persons” must fill in an income tax return and send this to the government. (MANY WORKERS WILL PAY MORE TAX IF THEY DON’T FILL IN THE INCOME TAX RETURN.)
Workers who get less than R8 000 do not have to fill In an income tax return every year. (R8 000 per year is R 154 per week or R3.34 per hour). But if workers think they paid too much tax every month, then they must fill in the return.
Learn and Teach will write about how to fill in the income tax return soon. We will explain how some workers can get money back every year.
THE GOOD AND THE BAD
The new tax law is a very difficult law. Some things in it are good for workers. But some things in it are bad.
Sheena Duncan of the Black Sash says, “The new law is a strange thing. Many men will pay less tax than before. But many thousands of married women will pay much more tax. Only men pay less tax because of children. But women also look after their kids. Men of all races must remember this. They must remember the women are paying most of the tax for the family.”
Many trade unions and worker leaders are worried about the new law. One worker leader says, “The new tax law might be a good thing. But the government did not talk to workers before they made the new law. So workers will not trust the law. Black workers will also pay the same tax as white workers. So now bosses must do the same – they must pay equal wages for equal work.”
Other worker leaders also complain that the law is very difficult and that many bosses will not explain the law to workers.
“But the biggest complaint of all,” says Sheena Duncan, “Is that black workers pay the same tax as whites. Yet they don’t have the vote and the government does not spend the same on blacks as it does on whites.”.