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Cape Town - The budget tabled in Parliament was in typical Gordhan style.
Little surprises, predictable and rather dull.
Perhaps the best news and surprise was that Gordhan still found room, despite the tight fiscal conditions, for personal income tax relief of R9.25bn for individual tax payers.
Nothing realised of some form of wealth tax for the rich.
Personal income tax as a percentage of total tax was somewhat lower than last year on 33.8%.
Of the R9.25bn tax relief 56% will, however, go to taxpayers earning less than R350 000 per year and 30% to taxpayers who earn between R350 000 and R750 000 a year.
More good news was the raising of the amount that a retiree can take from his pension savings as a tax-free lumpsum from R315 000 to R500 000.
Tax exemptions for interest, dividends and capital gains will also be granted for investments of not more than R30 000 per annum.
This is to encourage individuals to save in tax-preferred saving accounts.
Investments in bank deposits, collective investment schemes, exchange traded funds and retail savings bonds will be allowed to be offered in these savings accounts by banks, asset managers, life insurers and brokers.
Further details will be available over the course of the next 12 months.
Young workseekers should also be glad about the employment tax incentive, which subsidises the salaries of newly recruited 18 to 29 year old workers.
Another surprise was that Gordhan could keep up spending without the budget deficit going up.
The budget deficit on 4.0% of GDP was indeed slightly lower as the 4.1% projected in October last year.
Almost all social grants were increased by a percentage above the inflation rate, which is good news to all vulnerable people.
The number of children receiving the child support grant will increase to 11.4 million.
Other well regarded spending will go for the rebuilding of 433 schools over the next three years, an increase in money spent on clinics, hospitals and community facilities tot R9.4bn in 2016/17.
On the downside there is of course the increase in the so called “sin taxes”, as well as in the fuel levies.
Those that like their beer will pay 9c more for a 340ml can, wine will be 13c per 750ml bottle more, ciders and alcoholic fruit beverages 9c per 330ml bottle more, the stronger stuff (spirits) R4.76 per 750ml bottle more and Sparkling wine 62c per 750ml bottle more.
For smokers the increases are 68c per packet of 20 cigarettes, 9c per 25g of pipe tobacco and R5.11 per 23g of cigars.
The fuel levy increase of 12c per litre for both petrol and diesel will on top of the recent increases due to the weak rand be especially hard to swallow.
The Road Accident Fund levy will increase by 8c per litre of fuel. This will push up the general fuel levy on petrol to R2.25 per litre of petrol and to R2.10 per litre of diesel.
Taxes now represent almost a quarter of the pump price.
Little surprises, predictable and rather dull.
Perhaps the best news and surprise was that Gordhan still found room, despite the tight fiscal conditions, for personal income tax relief of R9.25bn for individual tax payers.
Nothing realised of some form of wealth tax for the rich.
Personal income tax as a percentage of total tax was somewhat lower than last year on 33.8%.
Of the R9.25bn tax relief 56% will, however, go to taxpayers earning less than R350 000 per year and 30% to taxpayers who earn between R350 000 and R750 000 a year.
More good news was the raising of the amount that a retiree can take from his pension savings as a tax-free lumpsum from R315 000 to R500 000.
Tax exemptions for interest, dividends and capital gains will also be granted for investments of not more than R30 000 per annum.
This is to encourage individuals to save in tax-preferred saving accounts.
Investments in bank deposits, collective investment schemes, exchange traded funds and retail savings bonds will be allowed to be offered in these savings accounts by banks, asset managers, life insurers and brokers.
Further details will be available over the course of the next 12 months.
Young workseekers should also be glad about the employment tax incentive, which subsidises the salaries of newly recruited 18 to 29 year old workers.
Another surprise was that Gordhan could keep up spending without the budget deficit going up.
The budget deficit on 4.0% of GDP was indeed slightly lower as the 4.1% projected in October last year.
Almost all social grants were increased by a percentage above the inflation rate, which is good news to all vulnerable people.
The number of children receiving the child support grant will increase to 11.4 million.
Other well regarded spending will go for the rebuilding of 433 schools over the next three years, an increase in money spent on clinics, hospitals and community facilities tot R9.4bn in 2016/17.
On the downside there is of course the increase in the so called “sin taxes”, as well as in the fuel levies.
Those that like their beer will pay 9c more for a 340ml can, wine will be 13c per 750ml bottle more, ciders and alcoholic fruit beverages 9c per 330ml bottle more, the stronger stuff (spirits) R4.76 per 750ml bottle more and Sparkling wine 62c per 750ml bottle more.
For smokers the increases are 68c per packet of 20 cigarettes, 9c per 25g of pipe tobacco and R5.11 per 23g of cigars.
The fuel levy increase of 12c per litre for both petrol and diesel will on top of the recent increases due to the weak rand be especially hard to swallow.
The Road Accident Fund levy will increase by 8c per litre of fuel. This will push up the general fuel levy on petrol to R2.25 per litre of petrol and to R2.10 per litre of diesel.
Taxes now represent almost a quarter of the pump price.
