Budget Speech Highlights
On February 23, 2023, South African Finance Minister Enoch Godongwana delivered the country’s budget speech, which focused on taxes and energy crisis.
It seems that once again SARS did a good job and more money than was initially expected came in, which will now immediately be spent servicing debt and on new projects (like hiring more thousands of much needed cops).
Godongwana acknowledged the impact of loadshedding on South African businesses and consumers and proposed measures to address the issue. These measures include incentivizing businesses to invest in renewable energy, offering home owners tax rebates and introducing penalties for companies that fail to meet energy efficiency targets.
‘Godongwana acknowledged the impact of loadshedding on South African businesses and consumers and proposed measures to address the issue’
Government will take on about half of Eskom’s massive debt in an effort to free up funds for them to use to actually fix and maintain equipment (instead of just paying off loans).
In some very welcome news it was announced that government would not raise income tax rates for individuals or businesses this year and will shift the tax bands to match inflation.
There will be the usual small increase excise duties on tobacco and alcohol products and on sugary drinks which is almost a given these days. Almost as obligatory was the announcement of billions of rands worth of bail out money for SAA and the Post Office. Apparently, SAA is very close to breaking even these days.
Other good news included the continuation of the R350 grant which millions of South Africans are receiving monthly, since the start of the Covid-19 pandemic. The grant will be around until at least next year March.
The Finance Minister also announced several other initiatives to promote economic growth and create jobs, including increased funding for small and medium-sized businesses, investments in infrastructure, and the expansion of the country’s digital economy.
It was seen as a fairly conservative budget that successfully upset almost everyone in some way or another and dealt with most of the elephants in the room.