INSIDE POLITICS TEAM|
SOUTH African taxpayers breathed a sigh of relief on hearing Finance Minister Enoch Godongwana’s maiden budget speech when he announced the adjustments in personal income tax brackets and rebates.
“The personal income tax brackets and rebates will be adjusted by 4.5 percent, in line with inflation. The adjustments will mean that the annual tax-free threshold for a person under the age of 65, will increase from R87 300 to R91 250,” he said.
Godongwana further announced good news by saying that there will be no increase in the fuel or Road Accident Fund levy, for the first time since 1990.
“In 2021, the inland petrol price breached R20 per litre. The higher prices have put pressure on the cost of transport, food and other goods and services. To provide some relief to households, no increases will be made to the general fuel levy on petrol and diesel for 2022/23. This will provide tax relief of R3.5 billion to South Africans. There will also be no increase in the Road
Accident Fund levy.”
“Households and businesses are still under financial pressure and are coping with higher obligations, the effects of Covid-19 and increased fuel prices. Now is not the time to increase taxes and put the recovery at risk,” said Godogwana.
CORPORATE TAX|
The corporate income tax rate has been reduced from 28% to 27%, for companies with years of assessment ending on or after 31 March 2023.
“As announced in the 2021 Budget, the corporate income tax rate will be reduced from 28 per cent to 27 per cent, for companies with years of assessment ending on or after 31 March 2023. This will be complemented by base-broadening measures to ensure that there is no negative impact on revenue,” he said.
Smokers and alcoholic drinkers, on the other hand, will have to delve deep into their pockets.
Alcohol and tobacco will increase by between 4.5 and 6.5 percent.
The increases mean that as from today:
• A 340ml can of beer or cider will cost 11c more.
• A 750ml bottle of wine will be 17c more expensive.
• A bottle of sparkling wine will cost an additional 76c.
• And a bottle of spirits will be R4.83 more expensive.
• A packet of cigarettes will cost an additional R1.03.
• 25 grams of piped tobacco will cost an extra 37c; and
• A 23 gram cigar will be R6.77 more expensive
The minister has also introduced a new tax on vaping products and beer powders.
“Government also proposes to introduce a new tax on vaping products of at least R2.90 per millilitre from 1 January 2023. A new tax will also be introduced on beer powders,” he said.
“After three years of no changes, the health promotion levy will be increased to 2.31 cents per gram of sugar.”
Godogwana added that the carbon tax is the main mechanism to ensure lower greenhouse emissions.
“The carbon tax rate will increase from R134 to R144, effective from 1 January 2022. As required by legislation, the carbon fuel levy will increase by 1c to 9c per litre for petrol, and 10c per litre for diesel, from 6 April 2022. The first phase of the carbon tax, with substantial allowances and electricity price neutrality, will be extended to 31 December 2025.”
– Inside Politics
