| We need to strike a critical balance between saving lives and livelihoods, while supporting inclusive growth. This budget presents this balance.” The 2022 Budget Speech took a positive turn (for the most part), as Finance Minister Enoch Godongwana delivered his maiden National Budget Address on 23 February 2022. On Wednesday, Minister Godongwana cited the continuing effects of the Covid-19 pandemic and the resulting financial strain that most South Africans are struggling under, saying in his address, “Now is not the time to increase taxes and put the recovery at risk.” While certain areas have seen an increase in taxes, the 2022 Budget primarily focuses on allowing both businesses and individuals to strengthen their financial foundation as South Africa works together as a nation to rebuild our economy. The 2022 Budget Address focused on collective participation and buy-in that will enable South Africa to steer the ship in the right direction. Though as Minister Godongwana reminds us, “a swallow does not a summer make.” The journey to recovery may still be long, but it seems as though we are off to a good start. |
| Overall:The consolidated budget deficit is projected to narrow from 6 per cent of GDP in 2022/23 to 4.2 per cent of GDP in 2024/25.The Government expects to collect tax revenue of R1 598 billion in 2022/23.Real GDP is expected to grow at 2.1 per cent in 2022 and average 1.8 per cent over the medium term.Consolidated government expenditure is expected to reach R2.16 trillion.Corporate tax rate to reduce to 27 per cent for tax years ending on or after 31 March 2023.The 2022 Budget provides R5.2 billion in tax relief to support households and the economy by not adjusting the general fuel levy (for the first time in 32 years) and the Road Accident Fund levy, while fully adjusting the personal income tax brackets and rebates for inflation.Total consolidated government spending will amount to R6.62 trillion over the next three years, and the social wage will take up 59.4 per cent of total non-interest spending over this period.Increasing the monthly benefits for employers under the employment tax incentive by 50 per cent.For consumers:“Bracket creep” is eliminated through above-inflation increases in tax brackets, effectively decreasing personal income tax rates.The exemption of foreign remuneration earned by South African tax residents remains unchanged.There is an undertaking by the National Treasury and the Minister of Minerals to review the fuel levy structure to arrive at a more sustainable future approach to fuel increases.Increases of between 4.5 and 6.5 per cent in excise duties on alcohol and tobacco.A proposal for a new tax on vaping products is being considered.The plastic bag levy is increased by 3 cents to 28 cents per bag from 1 April 2022. |
SOURCE: TONKIN CLACEY INCORPORATED
