Minister of Finance Pravin Gordhan. ~ SAPA
Cape Town - Finance Minister Pravin Gordhan clearly did not want to rock the boat in the rather conservative 2012/13 budget
he unveiled in parliament on Wednesday.
Most South Africans - as well as the business community and financial markets - should be pleased with a budget which takes the National Development Plan as its point of departure, and included tax relief of R7bn for individual tax payers in a challenging economic environment.
The highlights in a nutshell include:Budget deficit
The deficit is estimated higher, at 5.2% of gross domestic product (GDP) in 2012/13 (shortfall of R16.3bn). It is budgeted to come down to 4.6% in 2013/14 and 3.1% in 2015/16.Growth and inflation
Economic growth has been adjusted slightly downward from last year's budget with estimated figures of 2.7% in 2013, 3.5% in 2014 and 3.8% in 2015.
Consumer inflation is expected to be stable at 5.7% in 2013, slowing to 5.5% in 2015.Debt and loan service costs
Net loan debt is projected to reach 38.6% in 2013/14, and stabilise at just higher than 40% towards 2016. Debt service costs are expected to stabilise at 2.8% of GDP in 2012/13.Revenue and spending
Total spending in 2013/14 is seen at R1 149.4bn or 32.6% of GDP, and total revenue at R985.7bn or 28.0% of GDP.Personal tax
Individual tax payers will start paying tax at an annual income of R67 111 (R63 556 last year) for people below 65, R104 611 (R99 056) for persons 65 to 74 and R117 111 (R110 889) for persons over 75.
Individuals whose taxable income is only from a single employer and does not exceed R250 000 for the 2012/13 tax year are not required to submit tax returns.Sin taxes
Excise duties on alcohol and tobacco products will go up between 5% and 10%.
Fuel and environmental taxes
- Tax on malt beer increases by 7.5c, to R1.08 per 340ml can;
- Tax on unfortified wine increases by 15c per 750ml bottle;
- Tax on ciders and alcoholic fruit beverages increases by 7.3c per 330ml bottle;
- Tax on spirits increases by R3.60, to R39.60 per 750ml bottle; and
- Tax on cigarettes increases by 60c, to R10.92 per packet of 20.
The general fuel levy will rise by 15c per litre to R2.13 on April 3 2013, and the Road Accident Fund levy by 8c/l to 96c/l of petrol.
The levy on plastic shopping bags will rise from 4c to 6c per bag from April 1 2013.Social grants
The most important grants have all been raised by between 4% and 5%.
The old age grant will now be R1 260 per month and R1 280 for people over 75. The disability grant will now be R1 260, foster care R800, care dependency R1 260 and child support R290.Medical schemes
Monthly tax credits for medical scheme contributions (reduction of tax payable) will be increased from R230 to R242 for the first two beneficiaries on a medical scheme, and from R154 to R162 for each additional beneficiary on the medical scheme for R2013/14.Pension fund money
Proposals are considered which would require retirement funds to transfer members’ balances into a preservation fund when they change their employer. Youth employment
A youth employment tax incentive aimed at encouraging firms to employ young workers will be tabled for consideration by parliament. Infrastucture
Government will over the next three years invest R827bn into building new and upgrading existing infrastructure.
Additions to spending plans over the next three years include:
- R5.2bn to local government equitable share, to help smaller municipalities meet developmental commitments;
- R4.2bn to provincial equitable share to phase in adjustments resulting from Census 2011;
- R3.2bn to the Passenger Rail Agency of SA for rail signalling infrastructure;
- R2.6bn for regional bulk water infrastructure;
- R1.9bn for the municipal water infrastructure grant;
- R1.5bn for De Hoop dam;
- R1.4bn to the SA National Roads Agency Limited for road construction and maintenance;
- R1.1bn for the Square Kilometre Array and R0.6bn for science and technology infrastructure;
- R1bn to provinces to increase the number of teachers, and R800m for grade R teachers;
- R1bn to the human settlements grant; and
- R900m to the integrated national electrification programme.
- The current account deficit to average 6.2% over next three years;
- Moderate employment growth expected over the medium term;
- Spending cuts of R10.4bn over next three years in response to tight fiscal conditions;
- The contingency reserve reduced by R23.5bn over the medium term;
- Real growth in spending to average 2.3% over the medium term; and
- Tax relief for small businesses.