Budget Speech: Mboweni Increases Fuel Levies, Alcohol Tax and Social Grants
- Finance Minister, Tito Mboweni announced many increases in tax and levies during the budget speech on Wednesday
- Mboweni also announced increases in social grants and money put aside for Covid-19
- Taxpayers can breathe a sigh of relief after the minister announced personal income tax brackets will be increased too
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During the 2021 national budget speech on Wednesday, Finance Minister Tito Mboweni announced the government's financial plans for 2021.
Mboweni announced that corporate income tax will be lowered by 27%. The minister also spoke about the increase of the personal income tax bracket, fuel levies and an increase in excise duties (sin tax) on alcohol and tobacco.
Briefly.co.za takes a look at some of the key points discussed by the minister in his speech.
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2021 Medium-term Spending Plans and Job Creation
R83.2 billion has been cumulatively made available for public employment programmes since the 2020 Special Adjustments Budget.
R11 billion is being augmented for the Presidential Youth Employment initiative.
2021 Borrowing requirement
The country's borrowing requirement will be above R500 billion in each year of the medium-term. The gross loan debt will increase from R3.9 trillion to R5.2 trillion in the 2023/24 fiscal year.
2021 Corporate Income Tax
The corporate income tax rate will be lowered to 27% for companies with years of assessment commencing on or after 1 April.
2021 Personal Income Tax Brackets
Personal income tax brackets will be increased by 5%.
This will provide R2.2 billion in tax relief.
Mboweni said this will reduce the tax burden on lower and middle-income households. If one is earning above the new tax-free threshold of R87 300, there will be an extra R756 in hand after 1 March.
2021 Fuel Levies
Tito Mboweni announced during his budget speech that fuel levies will increase by 27c per litre:
- 15c per litre for the general fuel levy,
- 11c for the Road Accident Fund levy and,
- 1c for the carbon fuel levy.
2021 Excise Duties on Alcohol and Tobacco
There will be an 8% increase in excise duties on alcohol and tobacco products:
- A 340ml can of beer will cost an extra 14c,
- A 750ml bottle of wine will cost an extra 26c,
- A 750ml bottle of sparkling wine an extra 86c,
- A bottle of 750 ml spirits, including whisky, gin or vodka, will increase by R5.50,
- A packet of 20 cigarettes will be an extra R1.39c,
- 25 grams of piped tobacco will cost an extra 47c,
- A 23 gram cigar will be R7.71 more expensive.
2021 Social Grants
Regular social assistance grants have been adjusted:
- R30 increase in old age, disability and care disability grants,
- R30 increase in the war veterans' grant,
- R10 increase in the child support grant,
- R10 increase for foster care grant.
SARS Improves its Technology
The South African Revenue Services will be improving its technology, data and machine learning capability.
It will also be expanding specialised audit and investigative skills in the tax and customs areas.
Addressing corruption
Mboweni said the Justice and Constitutional Development department has been allocated R1.8 billion to improve business processes to support law enforcement to fight crime and corruption.
Briefly.co.za earlier spoke to an expert who gave insight into the Budget Speech. Senior Lecturer in the Department of Economics at Stellenbosch University, Dr Krige Siebrits believes there are two areas that will have the largest focus on during the 2021 National Budget Speech:
"The increasingly worrying fiscal position (as reflected in the rapidly growing public debt-to-GDP ratio), and the role of fiscal policy in an economy that has performed poorly for more than a decade and remains in the choking grip of the Covid-19 pandemic."
Dr Siebrits spoke to Briefly.co.za about what to expect during Finance Minister Tito Mboweni's Budget Speech.
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Source: Briefly News
