SA 2017/18 Budget : Gordhan Says Those Who Earn More Must Pay More

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Going through his SA 2017/18 budget to the parliamentary house, finance minister Pravin Gordhan says the treasury would be introducing a new SA tax measures that target those earning high in the country for the benefit of poor majority.

Giving highlight to his much anticipated SA 2017/18 budget, the minster said new top personal income tax rate of 45% is expected from those with taxable incomes of more than R1.5-million

By this the minister meant South Africans who earn more than R1.5 million a year will form part of a new tax bracket who will add an addition R16.5 billion to the fiscus which will cover a large bulk of the R28 billion shortfall;

Other new SA tax measures include:

  • Increase in the withholding tax on dividends from 15% to 20%;
  • Adjustments for bracket creep – when salaries rise with inflation but the tax brackets do not – will be limited.
  • A 30 cent per litre increase in the general fuel levy and a 9 cent per litre in the road accident levy;
  • An increase in the excise duties of alcohol and tobacco – the so-called ‘sin tax’ – of between 6% and 10%

The tax from the last two will give the treasury a total of R5-billion. Excise duties on alcohol and tobacco products will be increased between 6% and 10%.

Read Also: Gordhan Versus ANCYL War: League Launches Another Scathing Attack On The Minister

As predicted by many economists, the treasury made no change to VAT, though a revised carbon tax will be published for public consideration by the middle of the year. Instead, departments will experience further expenditure cuts and measures to reduce the public service wage bill are also on the cards.

The total SA 2017/18 budget was proposed to be around R1.56 trillion, of which tax revenues cover R1.41 trillion. The balance will be borrowed, Gordhan said.

Speaking further on his 2017/2018 budget, the minister said government will continue to prioritize spending on social services.



“The division of revenue involves a substantial redistribution of resources from the wealthiest areas in our country – where most of our taxes are raised – to lower-income communities and households. The allocations to predominantly rural municipalities are twice as large, per household, than those to metropolitan councils,” Gordhan said.

The old age grant will increase by R90 to R1600 a month for pensioners over 60 and to R1 620 for those over 75. Disability grants will also increase by R90 to R1600 a month.

Child support grants are not left out in the increase as government looks at increasing their grants by R20 to R380 a month even as foster care grants will increase by R30 to pay out R920 a month.

R5-billion will also be added to support the higher education allocations. This according to the minister is to ensure  that no student whose combined family income is below R600 000 per annum will face fee increase at universities and TVET colleges in 2017.”

Students who have qualified for a National Student Financial Aid Scheme loan would be supported, he said.

Read Also: Highlights Of The 2016 Budget As Presented By Finance Minister Gordhan

For those indulging in what is generally called sin tax items – that’s tobacco and alcohol for the uninitiated – the new SA 2017-18 budget will have a tax increase in the following items.

Malt beer – 12c per 340ml can
Unfortified wine – 23c per 750ml bottle
Fortified wine – 26c per 750ml bottle
Sparkling wine – 70c per 750ml bottle
Ciders and fruity boozy drinks – 12c per 340ml bottle
Spirits – R4.43 per 750ml bottle
Cigarettes – R1.06 per 20 pack
Cigarette tobacco – R1.19 per 50g
Pipe tobacco – 40c per 25g
Cigars – R6.58 per 23g

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