What To Expect From The Budget Speech
What Could We See During This Month’s Budget Speech?
Finance Minister Enoch Godongwana will soon be delivering the 2022 Budget Speech which will set out the breakdown of funds for government spending over the next 12 months and beyond.
What can we expect to see?
Low economic growth, increased unemployment, large government debt are coinciding with high inflation figures and the negative ramifications of both the ongoing Pandemic and the July 2021 days of shame rioting to create something of a nightmare for budgeting purposes.
Government is bringing in less tax and yet expenses are now higher than ever. On the positive side, many of those in positions of oversight and authority have been exposed for corruption and have had to stop misbehaving. This has the positive effect that much of the spending planned has actually been going where it is intended.
At the same time, Government has announced several new measures to help reduce pressure on those suffering due to the pandemic and are now faced with funding the emergency R350 grant.
With those factors in mind, what might we expect to see during the budget speech this month?
Corporate Tax to remain unchanged
This is because the planned changes from previous speeches require a lot of moving parts and so until those are in place (changes to other legislation etc) things must continue as is.
Personal Income Tax to remain unchanged
There are a limited amount of taxpayers in the country and they are already under pressure. Many high earners have left the country for greener pastures and growing unemployment is already placing this all important source of income under pressure. There may be some very minor adjustments to rebate levels etc due to inflation to ensure that these taxpayers are not hurt.
Possible Increase on Withholding Tax
It is possible that we may see some adjustments such as a change of the tax rate anywhere from 15% now up to 20%.
VAT to remain the Same…or maybe not
It is likely that the now extended emergency R350 grant will place Government under so much pressure that VAT could be hiked but it is more likely that we may see something about this later in the year (even if they are planning it now they may hold off on the announcement) or possibly next year.
Sins Tax At Inflation Rate
The alcohol industry, in particular, has taken some lockdown knocks (with massive reductions at emergency wards aligning with temporary bans on alcohol sales) during the Pandemic. As a result, Government may go somewhat easy on them this year and do what they have asked and try to align any increases to match inflation and no more.
Bye Bye TV Licence, Hello Save the SABC Tax
Since no one (less than 20%) pays their TV licence anymore a new tax may be introduced to keep the SABC afloat.
Retirement Fund Changes
We may see some exit tax on retirement fund interest changes and people being given access to a large portion (eg 33%) of their retirement funds. Or at least we may get an update on the plans for this.
30c Fuel Levy Increase?
Your wallet and purse are already under so much strain as petrol and diesel prices have skyrocketed but the bad news is that you may be in for more hurt. Time to buy a bicycle?
23rd Feb 2022
We will soon find out what the changes will be as the speech will be made on the 23rd of February 2022. Till then we wait and hope for the best.
