Budget in a nutshell

Finance Minister Nhlanhla Nene’s first national budget is conservative and shows government’s intent to tighten its belt. The budget deficit of 3,9% is lower than expected, although the total state debt will rise to 42,5% of Gross Domestic Product (GDP).

Rich South Africans will pay more tax, but not excessively more.

The only real surprise in the budget is the 80,5c per liter rise of the fuel levy, especially the 50c per liter levy of the Road Accident Fund.

Tax proposals 

Income tax:

  • Increase marginal personal income tax rates by one percentage point for all taxpayers earning more than R181 900 per annum.
  • Taxpayer with an income of R200 000 per annum will pay R21 per month more. (Younger than 65)
  • Taxpayer with an income of R500 000 per annum will pay R271 per month more. (younger than 65)
  • Taxpayer with an income of R1,105,000 per annum will pay R1105 per month more. (younger than 65)

Very little personal income tax relief via adjustments of tax brackets, rebates and medical scheme contributions:

  • Total fiscal drag relief is R8,5 billion.
  • Taxpayers earning less than R450 000 per annum will pay less.
  • Taxpayers earning more than R450 000 per annum will pay more.

VAT rate remains unchanged at 14%

Sin taxes

  Increase in duty % change
Can of beer (340ml) R1,24 6%
Bottle of wine 15c 4,8%
Bottle of sparkling wine 48c 7%
Bottle of whiskey (any spirits) R3,77 8,5%
Pack of 20 cigarettes 82c 7%
Cigars (23g) R3,09 5%

 

Transfer duties on the sale of property:

  • Rates and brackets to be adjusted to benefit middle-income households
  • No transfer duties payable on property transactions below R750 000
  • Decrease in transfer duties on property transactions between R750 000 and R2,3 million
  • Increase in transfer duties on property transactions above R2,3 million

Fuel Taxes

  • Increase in the general fuel levy of 30,5c per litre
  • Increase in the Road Accident Fund (RAF) levy of 50c per litre
  • Overall increase in the fuel levy of 80,5c
  • Overall tax on fuel is approximately 41%

 

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