the corner office

The budget's out, and no major shakes or surprises. Income taxes shuffle downward, (corporate tax down to a disappointing 29% from 30% and no let-up of STC), sin taxes up, and perks being tightened up a little.

Apart from the sin taxes, the only major changes for employees are the travel allowance changes, and the planned change to medical aid deductions.

There had been talk that travel allowance deductions would be severely curtailed; instead it seems that a gradual tightening up is happening instead to make them less "profitable," by increasing the amount of deemed private travel. Let's be honest - if you incur bona fide travel costs for your job, you could be keeping a log book and should get a fair shake, and for everyone else, the TA is really just a way to dodge tax or get a cash flow advantage. I'm all for simplification of deductions, so I don't think the changes are unfair, even if they do mean less in my pocket.

The change to medical aid deductions is interesting. Allowable deductions will go from the current 2/3 percentage deduction (regressive) to a flat deductible amount (progressive). If you're on a cheaper medical aid, you could save more, but if you're on a more expensive medical aid, it could hurt a little. The real question is how much the flat deduction will be, and whether the government will keep that deduction in line with annual medical inflation.

Sadly, no changes to forex control, but consensus is that nothing will happen until the forex amnesty process is finalised. This Moneyweb article reports that Trevor Manuel says he won't make any changes until people start bugging him about it. So, what's his email address again?