Budget 2016: the full skinny
BARE ESSENTIALS: ALL THE FACTS YOU NEED TO KNOW
Finance Minister Pravin Gordhan managed to dance on the head of a pin, raising more revenue while avoiding full austerity taxpayer pain in an election year.
The 2016 national budget shows government is serious about cutting expenditure without enforcing austerity measures on South Africans.
The most significant announcements:
Budget deficit is reduced to 3.2% of GDP, from 3.9% in 2015/16 tax year. The deficit will decrease in the following two tax years to 2.8% and 2.4%;
Government debt to rise by 11% to R2 trillion or 45.7% of GDP. Total debt will stabilise at 46% over the next two tax years;
No increase in personal income tax or VAT; Increases in capital gains tax; Increased focus to centralise procurement to limit corruption;
Increased Treasury oversight of stateowned enterprises and the investigation of the sale of minority equity stakes to private investors.
Tax changes
Government will raise an additional R18.1 billion during the new tax year and R15 billion each in next two;
No increase in personal income tax (of 13.7 million taxpayers, fewer than 1 million pay 64% of personal income tax revenue);
Tax relief of R5.5 billion to limit the impact of fiscal drag with the majority of the relief aimed at lower- and medium-income earners;
Increase in the effective capital gains tax rates for individuals (from 13.7% to 16.4%) and for companies (from 18.6% to 22.4%); The fuel levy will increase by 30c/ litre; Total fuel levy on petrol will amount to R4.43/litre or 36.5% of pump price;
Total fuel levy on diesel will amount to R4.28/litre or 45.4% of pump price;
Government to implement a tyre levy of R2.30 per kilogram from October 1;
Government to implement a sugar tax from March next year;
Increase of transfer duties on property sales above R10 million.
Sin taxes
Duties on malt beer rises by 8.5% to R1.35 per 340ml can;
No increase in duties of traditional African beer;
Duty on unfortified wine rises by 8% to R3.31 per litre;
Duty on fortified wine rises by 6.7% to R5.82 per litre;
Duty on sparkling wine rises by 8% to R10.53 per litre;
Duties on ciders and alcoholic fruit beverages rise by 8.5% to R1.35 per 340ml can;
Duty on spirits rises by 8.2% to R4.08 per 750ml bottle;
Duty on cigarettes rise by 6.7% to R13.24 per a packet of 20s;
Duty on cigars rise by 6.7% to R69.28 per 23g.
Government has commi ed to the following expenditure cuts:
Costs of travel, accommodation and conferences for public officials. The target is to save R1.6 billion over the next three years;
Vehicles for politicians (cost of new vehicles limited to R750 000);
Government to renegotiate leases of properties;
Procurement reforms to achieve savings of R25 billion per year by 2018/19.
SA has paid $150 million as part of $2 billion obligation to the New Development Bank. It was funded from the sale of government’s stake in Vodacom. In 2016/17, a futher $250 million will be paid.