The 2019 National Budget Speech, presented by South Africa’s Finance Minister Tito Mboweni, was seen by many as a tough balancing act.
The general consensus among Old Mutual’s economists is that the budget presents a heavy load for consumers as the tax burden rises by R15 billion.
Here are some key highlights:
No changes will be made to personal income tax brackets.
The tax-free threshold increases from R78 150 to R79 000.
Below-inflation increases in the general fuel levy and RAF levy, as well as an introduction of a carbon tax (from 5 June 2019), will see petrol go up by 29c per litre and diesel by 30c per litre.
Excise duty on a 340ml can of beer goes up by 12c.
Increase in sin tax will see a pack of 20 cigarettes go up by R1.14.
White bread flour, cake flour and sanitary pads will be zero-rated for VAT purposes from 1 April 2019.
Sugar tax increases from 2.1c per gram per 100ml above the first 4grams, to 2.21c per gram.
The eligible income bands for the employment tax incentive will be increased from 1 March 2019.
Gambling tax: proposal of 2012 budget (1% levy) – draft legislation to be introduced in 2019.
Overall tax revenue expected to underperform by R15,4 billion lower than the Medium Term Budget Policy Statement estimate.
The state is encouraging early retirement without penalties.
Education remains the highest budget item at R386,4 billion a year.
Financial support for Eskom will see an expenditure of R69 billion over the next 3 years.
Visit Old Mutual’s website for more detailed information and insights into the new budget.