With the Finance Ministers budget speech now a thing of the past let’s have a look at what has changed regarding personal taxes and how these will affect the “ordinary” man on the street.
The budget speech obviously covered many issues such as the Eskom crisis, education, health care & failing SOE’s (State Owned Enterprises) but we’ll just look at the taxes that directly affect us.
The obvious increases of the Fuel Levy will affect everyone and everything that is transported by any means and this in turn means increased costs of goods & services. The “sin” taxes (alcohol and cigarettes) may not affect all South Africans, but many people will feel these effects. Personal tax remain unchanged and the slight increases in social grants will unfortunately not be noticed by those who need them most!
As usual, the Fuel Levy has increased! It’s a lower increase than expected but it’s knock-on effect on absolutely everything that is transported will affect us all! Let’s hope that retailers and service providers don’t exploit the opportunity to increase costs beyond what is needed.
The current fuel levy is R5.34 for every litre of petrol bought and R5.19 for every litre of diesel. This consists of:
- R3.37 (petrol) and R3.22 (diesel) for the general fuel levy
- R1.93 for the RAF levy (for petrol and diesel)
- 4c for customs and excise taxes (for petrol and diesel)
The increases announced total 29c for every litre of petrol and 30c for every litre of diesel. This will bring the total taxes per litre to R5.63 & R5.49 for petrol and diesel respectively.
PAYE (Income tax)
The Income Tax brackets and Pay As You Earn (PAYE) tax has remained unchanged and the personal rebates have increased marginally. So marginally that you won’t even notice them! Medical Aid credits remain unchanged.
The so-called “sin” taxes are an easy target to be increased each year. Here are the details:
- The excise duty on a can of beer goes up by 12 cents to R1.74
- A 750ml bottle of wine will have an excise duty of R3.15, which is 22 cents more
- The duty on a 750ml bottle of sparkling wine goes up by 84 cents to R10.16
- The duty on a bottle of whiskey will go up by R4.54 to R65.84
- A pack of 20 cigarettes goes up by R1.14 cents to R16.66
- The excise duty on a typical cigar will go up by about 64 cents to R7.80
- There will be no change to the excise duty on sorghum beer
Social grants have increased with an inflation linked increase. This however is still a very low monthly amount and should truly motivate you to plan properly for your retirement! Even if you’re a late starter you had better get started as the new monthly allowance for pensioners is a mere R1,780 and for pensioners over the age of 75 it’s R1,800 (not sure how anyone can survive on that). Other social grants such as foster care and child support have also increased slightly but still remain extremely low.
Being an election year the government obviously could’t risk increasing taxes too much. This along with the fact that the general public are up in arms regarding the rampant corruption at all spheres of government. There is a general risk of a tax revolt although it’s unlikely that it would be formalised. What’s tending to happen is that tax payers are simply becoming less honest with their taxes and are trying to pay as little as possible.
Although we sympathise with this stance we at WellSpent certainly don’t recommend or agree with it. We do however love understanding and optimising our taxes in accordance with the law. Have a look at our Tax Category for a collection of tax-related posts.
We also recommend using TaxTim to complete your Tax Returns and we’ll give you a 10% discount if you use the voucher code: WELLSPENT19