Budget highlights: What you need to know

Finance Minister Enoch Godongwana’s first national budget does not contain any significant surprises.
Image: Shutterstock

Apart from hikes of sin taxes, no other tax increases were announced in Finance Minister Enoch Godongwana’s Budget speech on Wednesday.

Government’s fiscal position has also improved since last year, mostly due to tax revenues exceeding expectations by a mammoth R181 billion.

Watch/read: Finance minister delivers the Budget 2022 speech

Here are the highlights:

Fiscal framework:

2021/22 2022/23 2023/14 2024/25
Total revenue R1 721bn R1 770bn R1 853bn R1 978bn
Total expenditure R2 077bn R2 157bn R2 176bn R2 289bn
Budget deficit -5.7% -6% -4.8% -4.2%
Debt as percentage of GDP 70% 73% 74% 75%
Debt service costs R268bn R301bn R335bn R363bn

Government expects to achieve a primary surplus – where revenue exceeds non-interest expenditure – by 2023/24.

Economic outlook 2021 2022 2023 2024
GDP growth 4.8% 2.1% 1.6% 1.7%
Consumer price inflation (CPI) 4.5% 4.8% 4.4% 4.5%

Tax proposals 

  • No increases of income tax, Vat or fuel or Road Accident Fund levies
  • Companies tax (tax rate will be reduced from 28% to 27% next year)
  • You will only pay income tax if you earn more than R91 250 a year

Read: Some breathing space for battle fatigued taxpayers

Sin taxes

Excise duties on alcohol and tobacco will increase by between 4.5% and 6%.

  Increase in duty
Can of beer (340ml) 11c
Bottle of wine 17c
Bottle of sparkling wine 76c
Bottle of whiskey (any spirits) R4.83
Pack of 20 cigarettes R1.03
Cigars (23g) R6.77

 Grants

Grant Rand amount Increase
Old age R1985 5%
Old age, over 75 R2005 5%
War veterans R2005 5%
Disability R1985 5%
Foster care R1070 1.9%
Care dependency R1985 5%
Child support R480 4.3%

Government allocates an average of 59.4% of consolidated spending to the social wage over the medium term, to address poverty and unemployment and to support the economic recovery.

Spending programmes

Total consolidated government spending will amount to R6.62 trillion over the next three years, and the social wage will take up 59.4% of total non-interest spending over this period.

The bulk of the spending is allocated to learning and culture (R1.3 trillion), social development (R1 trillion) and debt-service costs (R1 trillion) over the Medium-Term Expenditure Framework.

Government has provisionally set aside R17.5 billion over the three-year Medium Term Expenditure Framework period for infrastructure catalytic projects.

The controversial e-toll system on the Gauteng Highway Improvement Project was not mentioned and appears here to stay, for now.

Read: More than R308bn allocated to bailing out failing SOEs

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Economic outlook 2021 2022 2023 2024
GDP growth 4.8% 2.1% 1.6% 1.7%
Consumer price inflation (CPI) 4.5% 4.8% 4.4% 4.5%

The real problem in a nutshell !!

No real growth and a stagnant/pessimistic outlook !!

When they give GDP growth, is that not real GDP growth??? Otherwise – eish

I always thought our problem was population grows faster than real GDP, now that is even worse

End of comments.

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ECONOMIC DATA  

  CPIThe Consumer Price Index (CPI) measures monthly changes in prices for a range of consumer products Apr 2022 5.90%
  CPI ex OERThe Consumer Price Index excluding Owners’ Equivalent Rent (CPI ex OER) measures monthly changes in prices for a range of consumer products excluding Owners’ equivalent rent that measures changes in the cost of owner-occupied housing Apr 2022 6.40%
  RepoThe rate at which the Reserve Bank lends money to the country’s commercial banks and set by the Reserve Bank’s Monetary Policy Committee. May 2022 4.75%
  Prime lendingThe Prime Lending Rate is the rate of interest that commercial banks will charge their clients when issuing a loan (home loan or vehicle finance) May 2022 8.25%
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