BUDGET SPEECH 2019

Home » BUDGET SPEECH 2019

Finance Minister Tito Mboweni in his budget speech at the National Assembly in Cape Town on Wednesday 20 February 2019, indicated that, South Africa is ready for renewal.

He pointed out six fundamental prescripts of the budget speech, being:

  1. Achieving a higher rate of economic growth;
  2. Increasing tax collection;
  3. Reasonable, affordable expenditure;
  4. Stabilising and reducing debt;
  5. Reconfiguring state-owned enterprises;
  6. Managing the public sector wage bill.

With the above in mind, the following changes have been made:

SIN TAX

2019 Sin tax is expected to increase as follows:

  • Excise duties on Cigarettes (box of 20) will increase by R1.14 and a cigar by 64 cents;
  • Excise duties on alcoholic beverages will increase as follows:
    • A can of beer will increase by 12 cents;
    • A 750ml bottle of wine by 22 cents;
    • A 750ml bottle of sparkling wine by 84 cents;
    • A bottle of whiskey and other spirits by R4,54.

Sin taxes are expected to rise at a total rate of between 7.4% and 9% with treasury expecting to raise an additional R1 billion from same.

PERSONAL INCOME TAX

  • No changes have been made to the personal income tax brackets;
  • This means that more South Africans will subsequently find themselves placed in higher tax brackets should they receive salary increases;
  • The tax threshold has however been slightly increased from R78 150.00 to R79 000.00;
  • The minister indicated that government is expected to raise an additional R12.8 billion due to the above.

VALUE ADDED TAX – VAT

The minister indicated that VAT remains unchanged at 15%. With effect from 1 April 2019, the list of VAT exempt items will be amended to include the following:

  • White bread flour, Cake flour and sanitary pads.

FUEL

South Africans are expected to feel a pinch on their pockets as the fuel levy will increase as follows:

  • 29 cents more per litre on petrol;
  • and 30 cents more per litre on diesel.

The aforementioned means that in total, individuals will be paying taxes totaling R5,63 per litre of petrol andR5,49 per litre of diesel. As from 3 April 2019, South Africans will also experience5 cents per litre fuel increase on the Road Accident Fund (RAF) levy. The minister is expecting the increases in fuel taxes as well carbon tax fuel to raise approximately R1.3 billion

MEDICAL TAX CREDITS

The medical tax credit will remain unchanged. The aforementioned is expected to raise R1 billion in revenue.

EDUCATION

More than R30 billion has been allocated for the maintenance and construction of schools.

HEALTH CARE

The health Sector will be allocated an amount of R717 billion. The minister further indicated that the National Health Insurance Bill of 2018 (NHI) will soon be ready to be tabled to parliament. In terms of the NHI, South Africans will be able to receive free services at the point of care in both public as well as private quality accredited health institutions.

SOCIAL GRANTS

Social grants will increase as follows:

  • Old age, disability, war veterans and care dependency grants will increase by R80.00;
  • Foster care grants will increase by R40.00; Child support grants will increase as follows:
    • R420.00 in April 2019; and
    • R430.00 in October 2019.

RETIREMENT LUMP SUM TAXATION

The first R500 000.00 of a retirement lump sum has remained tax-free and the first R25 000.00 of a pre-retirement lump sum withdrawal has remained tax-free. TRANSFER DUTY:Remains unchanged.

ESKOM

Eskom will receive a R69 billion support package which it will receive over a 3 year period to assist Eskom in servicing its debts. Eskom will further be split into 3 entities under the umbrella “Eskom Holdings” which will consist of Generation, Transmission and Distribution. In concluding the budget speech, finance minister Tito Mboweni mentioned that this is a budget which plants seeds for renewal and growth.

By |2019-03-24T18:16:51+00:00March 24th, 2019|Uncategorized|0 Comments