S.A's 2016 Budget in a nutshell - CNBC Africa

S.A's 2016 Budget in a nutshell

Southern Africa

by Benedict Pather 0

Photo: Pixabay

  • Overview

Government says economic growth was 1.3% in 2015, and is expected to decline to 0.9% in 2016, and is expected to rise to 1.7% in 2017 and 2.4% in 2018.

Budget deficit will fall from 3.2% in 2016/17 to 2.8% in 2017/18 and 2.4 % the following year.

Debt stock as percentage of GDP will stabilise at 46.2% in 2017/18

This low economic growth translates into reduced tax revenue. The gap between government spending and revenue stands at 4.2% of GDP in 2016/16. Spending has outpaced revenue. Debt has climbed steadily.

Over the next three years, government will lower the expenditure ceiling, increase tax revenues, and reduce compensation budgets by R10bn in 2017/18 and R15bn in 2018/19. An additional R48bn in tax revenue will be raised over the next three years, by adjusting tax and reducing tax collection.

  • Personal income tax

The 2016 budget sees a reduction of R5.65bn in personal income payable by individuals. This is made up of R5.5bn to partially reduce the effect of inflation on tax payable by lower to medium income earners and R1.1bn due to increase in monthly medical scheme tax credit, less R950m due to the increase in capital gains.

Taxable income of individuals

Tax payable

0 to 188 000

18% of taxable income

188 001 – 293 600

33 840 + 26% taxable income above 188 000

293 601 – 406 400

61 296 + 31 % of taxable income above 406 400

406 401 – 550 100

147 996 + 39% of taxable income above 550 100

550 101 – 701 300

147 996 + 41 % of taxable income above 701 300

701 301 and above

206 964 + 41 % of taxable income above 701 300

Trusts other than special trusts

Rate of tax 41%

  • Sin taxes

Excise duties on alcoholic beverages will increase by 6.7% and 8.5%:

 

Increase by:

Malt Beer

11c per 340ml can

Unfortified wine

18c per 750ml bottle

Fortified wine

27c per 750ml bottle

Sparkling wine

59c per 750ml bottle

Spirits

R3.94 per 750ml bottle

Ciders and alcoholic fruit beverages

11c per 340ml

Cigarettes

82c per pack of 20

Cigarette tobacco

94c per 50g

Pipe tobacco

27c per 25g

Cigars

R4.32 per 23g

  • Increase in general fuel levy

General fuel levy will increase by 30c per litre on 6 April 2016, This will push up general fuel levy to R2.85 per litre and to R2.70 per litre of diesel.

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