Budget Speech Summary.
In South Africa, every year our finance minister Enoch Godongwana gives an update on how much tax the government will be collecting from us as taxpayers, using the South African Revenue Service; and how the government will be spending the funds through the next financial year - which is outlined through the annual budget speech.
With the country facing a dire debt situation, the speech was at the core of solving the debt crisis while sustaining growth for the economy. In a simple, for every R1 SARS collected from taxpayers, 20c of this is going towards paying off debt. This enables the government to continue generating revenue for developments and investments - both the economy and people.
Some of our EASY highlights
If you own a business, you are going to pay less tax on your income. This is down from 28% to 27% 😎.
Business owners will also have access to a BOUNCE BACK scheme which will be launched in March.
Sin taxes (which refers to a special tax on products that are deemed harmful to people or society) have increased as follows:
- A 340ml beer will cost 11c more.
- A 750ml bottle of wine will cost 17c more.
- A bottle of sparkling wine will cost 76c more.
- A bottle of spirits (Vodka, gin, brandy etc) will cost R4.83 more.
- A packet of cigarettes will cost R1.03 more.
- There is a proposal for a NEW Vaping tax of around R2.90 per millilitre from January 2023.
(Remember these are just the taxes that are levied on the products).
- Donations tax, Capital Gains Tax (CTG) and Estate duty are unchanged.🍭
2022/2023 personal income tax table:
Individual and special trusts
|Taxable Income (R)||Rate of tax|
|0 -R226 000||18% of taxable income|
|R226 001 - R353 100||R40 680 + 26% of taxable income above R226 00|
|R353 101 - R488 700||R73 726 + 31% of taxable income above R353 100|
|R488 701 - R641 400||R115 762 + 36% % of taxable income above R488 700|
|R641 401 - R817 600||R170 734 + 39% of taxable income above R641 400|
|R817 601 - R1 731 600||R239 452 + 41% of taxable income above R817 600|
|R1 731 601 and more||R614 192 + 45% of taxable income above R1 731 600|
The tax threshold has increased as follows:
|People younger than 65 years||R91 250|
|People older than 65 years||R141 250|
|75 years +||R157 900|
*Taxpayers only start paying taxes when they start earning above these amounts
The 2 Pot retirement system is a retirement system that the government has had on the table over the past financial years and could come into effect later this year. What this means for EasyVSTRs with Retirement Annuities and Pension Funds, is that they will be able to access funds before the age of 55.
Learn more about how to save for retirement here or below.
This could enable more people to preserve their funds by moving companies rather than accessing to pay off debt. while there may be upcoming Terms and Conditions (T&C’s) for the system. We are watching this space.😎
On the Retirement note, Retirement funds will be able to invest offshore; for South Africans, this may be an opportunity to expose their retirement investment to international markets for the long term and access to more markets.
Explaining what this means to EasyVSTRs Emperor Asset Managements, Shaun Krom, said:
"EasyVSTRs can get access to the World's leading companies, like Tesla, Amazon etc".He also adds this helps with the risk versus return in their portfolios and will make use of this opportunity.