Budget in a nutshell

All you need to know about Budget 2015.

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.

Fiscal framework:

 

 

2015/16

2016/17

2017/18

Total Revenue

R1189bn

R1331bn

R1439bn

Total expenditure

R1351bn

R1449bn

R1562bn

Budget deficit

-3,9%

-2,6%

-2,5%

Debt as percentage of GDP

42.5%

43.1%

43.7%

Debt service costs

R126bn

R141bn

R153bn

Balance of payments deficit (% of GDP

-4,5%

-4,9%

-5,2%

 

 

Economic outlook

2015

2016

2017

GDP growth

2%

2,4%

3%

Consumer price inflation (CPI)

4,3%

5,9%

5,7%

 

 

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%

 

Electricity levies

·      Proposed increase of the electricity levy from 3,5c/kWh to 5,5c/kWh. (This is a temporary measure and will be replaced by a carbon tax in 2016)

·      Energy-efficiency savings tax incentive to increase from 45c/kWh to 95c/kWh

 

 

Grants

·      Old age, war veterans, disability and care dependency grants will increase by 4,4% or R60 to R1410 per month.

·      Child support grants increase to R330 per month.

·      Foster care grants increase by 3,3% or R30 to R860 per month.

 

Spending programmes:

Over the next three years, government will spend:

·      Total expenditure will increase by 7.9% per year from R1 240 billion in 2014/15 to R1 560 billion in 2017/18

·      At least 60% of non-interest expenditure to improve social services and alleviate poverty.

·      R647 billion on basic education, including R36.7 billion on school infrastructure.

·      R634 billion on local development and social infrastructure, including R145.5 billion on municipal infrastructure.

·      R502 billion on health, with R46.6 billion on the HIV and AIDS conditional grant.

·      R498 billion social protection.

·      R197 billion on post-school education and training.

·      R18 billion on providing free meals to over 9 million learners.

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