Finance Minister Enoch Godongwana delivered his maiden Budget Speech on Wednesday, 23 February. He noted that although the easing of COVID-19-related restrictions supported a return to economic growth in 2021, the country is still under financial pressure and dealing with the effects of the pandemic, rising inflation, increased fuel prices and a series of interest rate increases. The Minister acknowledged that now is therefore not the time to increase taxes, which would put the economic recovery at risk. The theme of this year’s Budget is “keeping money in the pockets of South Africans”.
The key take-outs from this year’s Budget are summarised below:
- Inflationary relief through a 4.5% adjustment in the personal income tax brackets and annual tax rebates.
- As announced in last year’s Budget, the corporate income tax rate will reduce by 1%, from 28% to 27%, effective for years of assessment ending on or after 31 March 2023.
- No increase in the general fuel levy or the Road Accident Fund (RAF) levy.
- The monthly benefits for employers under the employment tax incentive will be increased by 50% to R1 500.
- Excise duties on alcohol and tobacco will increase by between 4.5% and 6.5%.
- The health promotion levy on beverages will be increased by 0.1 cent to 2.31 cents per gram of sugar from 1 April 2022.
- The plastic bag levy will increase by 3 cents to 28 cents per bag from 1 April 2022.
Please see the link below for the Budget Tax Guide for the 2022 tax year as published by SARS. It’s a concise booklet which is great to have saved (you could also bookmark the page) and on-hand throughout the year.
Credit: Carrie Norden of Allan Gray (originally published 23 February 2022)