BUDGET BRIEFS

SOCIAL GRANTS

To offset the impact of the

VAT increase on the poor, the government has increased its social grants by more than the inflation rate (currently 4.4%) in most cases. According to the Budget Review:

• The old-age, disability and care-dependency grants will increase by 5.9% to R1 695 a month;

• The over-75 and war veterans grants will increase by 5.9% to R1 715 a month;

• The foster-care grant will increase by 4.3% to R960 a month; and

• The child-support grant will increase by 6.6% to R405 a month.

‘SIN TAXES’

Excise duties on alcoholic beverages will increase by between 6% and 10%, and on tobacco products by 8.5%. Among others, wine will cost 23 cents more per bottle, beer 15c more per can, spirits R4.80 more per bottle, and cigarettes R1.22 more per packet of 20.

GREEN AND SUGAR TAXES

The following measures will be effective from April 1:

• The plastic bag levy will increase by 50% to 12c a bag;

• Vehicle emissions tax will increase to R110 for every gram above 120g of carbon dioxide per kilometre for passenger vehicles and to R150 for every gram above 175g of carbon dioxide per kilometre for double-cab vehicles;

• The levy on incandescent light bulbs will increase from R6 to R8; and

• A health-promotion levy that will tax sugary beverages is yet to be finalised.

TRAVEL REIMBURSEMENTS

Rob Cooper, a tax expert and the director of legislation at Sage, says great news for taxpayers and employers is that the government has scrapped the 12 000km-ayear limitation for using the prescribed rate per kilometre to calculate travel reimbursements. “This will simplify travel reimbursement administration but could open the door for increased levels of non-compliance in respect of travel reimbursements. On the whole, however, this will make life much easier for businesses,” Cooper says.

SPECIAL ECONOMIC ZONES

National Treasury has decided that six special economic zones (SEZs) should be recognised by the Economic Tax Incentive Act. Employers will be able to claim a tax incentive for all employees working in one of these SEZs, irrespective of an employee’s age, but subject to qualification tests such as minimum wage and maximum remuneration.

Outside of the SEZ, employers can claim for the incentive only for employees aged 18 to 29 years. “This is a great way to generate more employment in the SEZs,” Cooper says. The SEZs are Coega, Dube Trade Port,

East London, Maluti-a-Phofung, Richards Bay and Saldanha Bay.