BUDGET SPEECH:Key Points
Category Finance
Good news for all South Africans as the 2021 Budget Speech is free from substantial tax hikes to bankroll South Africa's COVID-19 vaccination program.
The Budget Speech comes after South Africa's second wave of COVID-19 infections and economic restrictions following a year of national lockdowns aimed to curb and reduce the number of infections.
The speech also comes as government prepares for South Africa's biggest vaccination program in history.
Recent challenges forced government to re-evaluate the economic outlook of the Medium-Term Expenditure Framework and challenges such as slow economic growth, unemployment, public service wage bill and national debt was also addressed.
The budget review is expected to total R6,16 trillion over the next 3 years. This equated to R2 trillion each year over the medium-term, most of the spend will go to Social Services.
Vaccine Funding
R19,3 billion has been set aside to fund the COVID-19 vaccinations. No new taxes have been introduced to fund the vaccines. These will be rolled out free of charge to most South Africans while private health care providers will be able to claim back from medical aid schemes.
No Increase in Direct Taxes
There are no hikes for personal income tax and corporate income taxpayers. This will aid economic recovery on households and business. Revenue shortfall is now expected at R213 billion lower than the R312 billion forecasted in October 2020.
Hikes on Indirect Taxes
There will be an 8% increase for alcohol and tobacco products to promote public health and substance discourage abuse.
Fuel Levy
The fuel levy will increase by 15 cents per litre, and the Road Accident Fund levy increases by 11 cents per litre on 7 April 2021.
Estate Duty
This remains unchanged for the 2022 financial year at 20% on the first R30 million, and 25% for the amount above R30 million.
Withholding Tax
Withholding tax also remains unchanged at 7,5%, 10% and 15% on the sale of immovable property by a non-resident.
Income Tax thresholds have increased to:
|
Taxable Income (R) Rate of Tax (R) |
|
1 - 216 200 18% of taxable income |
|
216 201 - 337 800 38 916 + 26% of taxable income above 216 200 |
|
337 801 - 467 500 70 532 + 31% of taxable income above 337 800 |
|
467 501 - 613 600 110 739 + 36% of taxable income above 467 500 |
|
613 601 - 782 200 163 335 + 39% of taxable income above 613 600 |
|
782 201 - 1 656 600 229 089 + 41% of taxable income above 782 200 |
|
1 656 601 and above 587 593 + 45% of taxable income above 1 656 600 |
Author: Jaco Deyzel
