NATIONAL NEWS - The Minister of Finance, Enoch Godongwana, recognises the inequalities and deprivation that still scar our society and therefore confirms that the 2024 Budget is tabled to secure the goal of growing our economy:
“The budgets we have tabled since 1994, have been about securing the goal of growing the economy, so that we can do more to address the inequalities and deprivation that still scar our society and undermine the promise of democracy. So, it is with a great sense of privilege and purpose that I stand before you to present this last budget of the sixth democratic administration.”
“The point, Madam Speaker, is that the size and quality of the national pie is what informs, and ultimately determines, the realisation of our political imperative of redistribution.”
Highlights
- This budget contains tax increases to raise an additional R15 billion in 2024/25, predominantly through personal income tax by not adjusting tax brackets, rebates and medical tax credits for inflation.
- Tax revenue for 2023/24 is R56.1 billion less than estimated in 2023. This shortfall is largely attributed to the decline in corporate profits, particularly in mining. Compared to last year, the budget deficit for 2023/24 is estimated to worsen from 4.0 to 4.9 per cent of GDP.
- The budget shortfall is to be funded by withdrawing a once-off 30 per cent of the R500bn strategic Gold and Foreign Exchange Contingency Reserve held by the Reserve Bank.
- South Africa’s 2023 GDP growth estimate has been revised down to 0.6 per cent due to widespread power cuts, operational and maintenance failures in rail and at ports, as well as high living costs.
- Consolidated Government expenditure is increasing from R2 240 billion to R2 370 billion.
- Debt servicing costs and the social wage amount to 80 per cent of budgeted payments by Government.
- To address high levels of illicit tobacco, SARS is deploying CCTV and related technologies at licensed tobacco manufacturers. Investigations and prosecutions have resulted in increased collection in the illicit tobacco industry.
- No changes to the general fuel levy, resulting in tax relief of roughly R4 billion.
“Our challenge, honourable members, is that the size of the pie is not growing fast enough to meet our developmental needs.”
Taking stock
- Proposed refinements aimed at taxing deemed income for families providing funding to trusts.
- On environmental taxes: carbon tax is increased from R159 to R190 per tonne of carbon dioxide equivalent, and the plastic bag levy is increased to 32 cents.
- The tax allowance provided for learnership agreements under section 12H is extended to 31 March 2027.
- A tax incentive is introduced for producers of electric vehicles in South Africa who will be able to claim 150 per cent of qualifying investment spending as a tax deduction to aid the transition to new energy vehicles.
- Government will reconsider the generation threshold and leasing restrictions of section 12B. Any proposals will be designed to take effect from 1 March 2025.
- Using big data and artificial intelligence, SARS’ automated risk engines prevented over R60 billion in impermissible VAT refunds and fraud this past year.
- Excise duties will increase: for alcoholic beverages, between 6.7 and 7.2 per cent and tobacco, between 4.7 and 8.2 per cent.
- Of the total revenue collected by Government, 40 per cent is raised from personal income tax.
- A global minimum tax rate of 15 per cent is to be introduced for large multinational groups. The proposed reform is expected to yield an additional R8 billion in corporate tax revenue in 2026/27.
‘We bring you the latest Garden Route, Hessequa, Karoo news’
