Tag Archive | secondary tax

SA Budget – 2012/3

Having announced that South African finances were “in good health”, a silence echoed around the National Assembly debating chamber as finance minister Pravin Gordhan announced in this year’s budget statement a general fuel levy on petrol and diesel, which will go up on April 4 by 20 cents and the fact that the RAF levy would go to 88 cents, i.e. up by 8 cents.

A levy on generated electricity from non-renewable sources will increase by 1 cent per kWh from July and this will replace current energy efficiency initiatives.

Again, as per last year, Minister Gordhan has proposed personal income tax relief, this year amounting to R9.5bn. A further tax credit for contributions to medical schemes is to be introduced, with reform to tax treatment of contributions being planned.

The introduction of short and medium term savings exemption programmes is to be introduced and the capital gains tax for individuals goes to 33.3% from March 1 and for companies to 66.6%.

A number of measures are to be introduced to improve the corporate tax environment but ways to finance the forthcoming National Health Insurance programme have to be found, minister Gorhan said, and this could include an increase in VAT, a payroll tax or a surcharge on general tax.

However a grant would suffice in the meanwhile until 2014 when a workable system would have to be found  to provide” an equitable system of health coverage for all South Africans”.

Commentators, we see, have already discounted a possible VAT increase as politically dangerous for the ANC, pointing to a general payroll increase during the early stages at 0.5%, other government-watchers noting that such a welfare programme is likely to be introduced on a province-by-province basis in line with the hospitalisation infrastructure programme.

The minister clearly indicated that a carbon tax was to be introduced.

A budget deficit of 4.6% of GDP, with government debt reaching R1.5 trillion by 2014/5, was announced by the minister.

Considerable additional investments are to be put into health and education with, for example, a further R850m for additional university infrastructure and R426m for tertiary hospitals, plus R450m for nursing colleges.  R9.5bn is to be provided for investment incentives and the development of SEZ programmes, with R6.2bn to be spent on job creation.  R4bn is specially going to PRASA for passenger coaches (refer our post), with R4.7bn for solar water geysers; R1.8bn on water infrastructure and R3.9bn on informal settlement upgrading.

Total spending on infrastructure and similar developmental issues was expected to reach R1.05 trillion this coming year, rising to R1.15 trillion next year.

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