Budget 2022: Top five changes you should know about

Finance minister Enoch Godongwana delivered his national budget speech in Cape Town on 23 February.

HERE ARE THE FIVE THINGS SOUTH AFRICANS SHOULD KNOW:

Personal Income Tax:

The personal income tax brackets and rebates will be adjusted by 4.5 percent, in line with inflation.

The adjustments will mean that the annual tax-free threshold for a person under the age of 65, will increase from R87 300 to R91 250.

Medical tax credits will increase from R332 to R347 per month for the first two members, and from R224 to R234 per month for additional members.

Employment tax incentive:

The employment tax incentive will be expanded through a 50 per cent increase in the maximum monthly value to R1 500.

“I encourage small and medium firms to take up this incentive. We anticipate that the expansion will provide additional support worth R2.2 billion,” he said.

Fuel Levies:

In 2021, the inland petrol price breached R20 per litre. The higher prices have put pressure on the cost of transport, food and other goods and services.

To provide some relief to households, no increases will be made to the general fuel levy on petrol and diesel for 2022/23.

This will provide tax relief of R3.5 billion to SouthAfricans.

There will also be no increase in the Road Accident Fund levy.

Corporate Income Tax:

Godongwana said restructuring the corporate income tax system is an important part of the government’s efforts to create a conducive environment for businesses to grow, increase investment and employ more people.

As announced in the 2021 Budget, the corporate income tax rate will be reduced from 28 per cent to 27 per cent, for companies with years of assessment ending on or after 31 March 2023.

Excise duties:

Excise duties on alcohol and tobacco will increase by between 4.5 and 6.5 percent.

The increases mean that as from today:

• • A 340ml can of beer or cider cost 11c more;
• • A 750ml bottle of wine will be 17c more expensive;
• • A bottle of sparkling wine will cost an additional 76c;
• • And a bottle of spirits will be R4.83 more expensive;
• • A packet of cigarettes will cost an additional R1.03;
• • 25 grams of piped tobacco will cost an extra 37c; and
• • A 23 gram cigar will be R6.77 more expensive.

The government also proposes to introduce a new tax on vaping products of at least R2.90 per milliliter from 1 January 2023.

A new tax will also be introduced on beer powders.

After three years of no changes, the health promotion levy will be increased to 2.31 cents per gram of sugar.

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