FREE HIGHER EDUCATION

IN DECEMBER last year, former President Jacob Zuma announced fee-free higher education and training for students from families whose income is less than R350 000 a year. An amount of R57 billion has been allocated to fund the system over the medium term. This includes a subsidy to universities to fund a zero-increase in fees this year for students from families with a household income of between R350 000 and R600 000.

The National Student Financial Aid Scheme (NSFAS) will provide bursaries for undergraduate university and technical and vocational education and training (TVET) college students from homes with a household income of below R350 000. The bursary will cover the full cost of study, which includes tuition, study

HIKES AIMED AT THE WEALTHY

A wealth tax, touted by the Davis Tax Committee, which has provided input to the government on tax reforms, has not materialised in this year’s Budget, but the government has introduced certain measures aimed specifically at the wealthy:

• Estate duty increased to 25% on estates with a value of more than R30 million; and material, and subsidised meals and accommodation and/or a travel allowance. This year, the bursary will cover students only in their first year of study. Next year, the scheme will cover first- and second-year students.

The conditions attached to the bursary have been developed by the Department of Higher Education and Training.

Returning university students on NSFAS loans (those from homes with an income of under R122 000 a year) who are in their second, third or fourth year of study this year will have their loans converted into bursaries under the same conditions as when they first received financial support. This does not apply to

TVET students currently on NSFAS, because they have always received bursaries, not loans.

• Donations tax increased to 25% on donations of more than R30 000.

Citadel fiduciary managing director Hilary Dudley says although this will bring in some additional revenue, these increases were a “strategic move” to counteract the VAT rate increase.

“Treasury could not be seen to be taxing lower- and middle-income earners and disregarding the wealthy. From a tax point of view, the Budget seemed to balance calls to tax the wealthy with the need to broaden the tax base,” she says.

Another measure aimed at the wealthy is an increase in the ad valorem excise duties on imported motor vehicles and luxury goods, such as cosmetics and electronics.

Effective from April 1, says the 2018 Budget Review, the maximum ad valorem excise duty on motor vehicles will be increased from 25% to 30%.

The classification of cellular telephones will be updated to include smartphones. The rates, now at 5% and 7%, will be increased to 7% and 9%.

“Government will also consult on a proposal to replace the flat rate for cellphones with a progressive rate structure based on the value of the phone,” the document says.

FUEL LEVY INCREASES

A measure that may hurt the poor because of the relatively high portion of their income they spend on transport are the increases in the fuel levies, effective April 4.

The general fuel levy will increase by 22c to R3.37 a litre of petrol and to R3.22 a litre of diesel. The Road Accident Fund levy will increase by 30c to R1.93 a litre. The overall increase of 53c will push up the cost of fuel by about 4%. However, the increase may be offset in the future by a lower petrol price on the back of a stronger rand.

martin.hesse@inl.co.za