In his 2022 budget speech, Finance Minister Enoch Godongwana revealed a more positive picture for government’s finances. The South African Revenue Service took in R182 billion more than expected in the past year.
These stronger revenues allowed the Minister to announce a number of tax relief measures. “Now is not the time to increase taxes and put the recovery at risk,” he said.
He also emphasises that: “Corruption is a major blight on our country. It has lowered our economic growth potential, made us fiscally more vulnerable, and severely weakened the state’s capability”. National Treasury will be looking to recover money from those involved in corrupt activities highlighted by the Zondo Commission.
BUDGET SPEECH 2022 – A brief summary
Personal Tax : Tax brackets and rebates have increased by 4.5% in line with inflation. The highest marginal tax bracket of 45% is now from R1,731,601. The primary rebate will be R16,425, up from R15, 714.
Medical Aid Credits: Increased from R332 to R347 for the first 2 members and from R224 to R234 for subsequent members.
Employment Tax Incentives: To help address youth unemployment, the employment tax incentive will increase from a maximum of R1,000 per month to R1,500 per month in the first 12 months, and from R500 to R750 in the second 12 months.
Transfer Duties: Transfer duty rates were unchanged.
Tax Free Threshold: The annual income level at which under 65’s will start paying tax was raised from R87,300 to R91,250.
Corporate Income Tax: Falls to 27% from 1 April 2022, as announced last year.
VAT: Remains unchanged at 15%.
Capital Gains Tax: No changes were announced to CGT.
Retail Savings Bonds: A new ‘top-up’ bond will be offered from April 2022, allowing individuals to invest an initial amount of R500 and top up in increments of R100.
- Fuel levy: For the first time since 1990, there was no increases in the general fuel levy.
- Road Accident Fund: Similarly, the Road Accident Fund levy remained unchanged.
- Carbon Tax: To increase by 1c per litre.
- Total Fuel Taxes: A minor increase to R6.16 on a litre of petrol and R6,02 on a litre of diesel.
Business Bounce Back Scheme: To support small businesses affected by Covid-19, R20 billion will be made available as guarantees for small business loans and equity-backed loans.
- Child Support Grant: Increases by R20 per month.Z
- Foster Care Grant: Increases by R20 per month
- Old Age & Disability Grants: Increase by R90 per month in April and a further R10 per month October.
- War Veterans Grant: Increases by R90 per month in April and a further R10 per month in October.
- Social Relief Distress Grant: The R350 emergency grant is extended for a further 12 months until March 2023.
Basic Income Grant: No announcement was made on implementing a Basic Income Grant.
Tax Free Savings Accounts: The annual cap on contributions to tax-free savings accounts remains at R36000 from 1 March 2021, with the lifetime limit also remaining at R500,000.
SIN TAXES: Overall, increases were between 4.5% and 6.5%, below the increases last year that were above 8%.
- Wine: Tax on a 750ml bottle of wine will go up by 17c.
- Sparkling Wine: Tax on a 750ml bottle will go up by 76c.
- Beer: Tax on a 340ml beer up 11c.
- Spirits: Tax on a 750ml bottle of spirits will go up R4.83.
- Cigarettes: Tax on a pack of cigarettes will go up R1.03.
- Cigars: A 23g cigar will attract R6.77 more tax.
- Pipe Tobacco: A 25g of pipe tobacco will cost an extra 37c more in tax.
- Vaping: A new tax on vaping products of at least R2.90 per millilitre will be introduced from the start of 2023.
- Plastic Bag Tax : Plastic bag tax increases from 3c to be 28c per bag
CLICK HERE TO VIEW SARS’ TAX GUIDE
For professional legal advice, contact the team at Goldberg & de Villiers Inc. on 041 5019800.