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Thread: Good News Budget

  1. #1
    Moderator IanF's Avatar
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    Thumbs up Good News Budget

    Budget in a nutshell

    An overview of the key proposals in the budget
    Felicity Duncan
    20 Feb 2008 14:25

    * Economy & government revenue 2008/9

    * GDP growth was 5% in 2007, it is projected to decrease to 4% in 2008, rising to 4,6% in 2010 (average over the period: 4,3%)
    * CPIX in 2007 averaged 6,5%; it is projected to rise to 7,1% in 2008 before declining to 4,9% in 2009
    * Gross fixed capital formation is projected to rise from 21% of GDP in 2007 to 24% in 2010
    * There will be estimated consolidated national budget surpluses of 1% in 2007/08 and 0,8% in 2008/09, with projected surpluses over the three-year period
    * There will be real growth in consolidated government non-interest expenditure of 6,1% a year over the MTEF
    * Government's contribution to national savings is projected to rise from 0,8% of GDP in 2006/07 to 1,5% in 2010/11
    * Gross tax revenue of R571,1-bn was collected for 2007 (R5-bn higher than revised target announced in the Medium Term Budget Policy Statement)
    * Exchange controls are removed for institutional investors

    Main tax proposals for 2008/9

    * Personal tax relief for individuals of R7,7-bn
    * Income tax threshold for under 65s - R46 000 (2007/8: R43 000)
    * Income tax threshold for over 65s - R74 000 (2007/8: R69 000)
    * Interest and dividend income tax threshold for under 65s - R19 000 (2007/8: R18 000)
    * Interest and dividend income tax threshold for over 65s - R27 500 (2007/8: R26 000)
    * Tax-free medical scheme contributions
    * First two beneficiaries - R570 (2007/8: R530)
    * Additional beneficiaries - R345 (2007/8: R 320)
    * Tax-free fringe benefit for bursaries for relatives of employees earning R100 000 a year (2007/8: R60 000) - R10 000 (2007/8: R3 000)
    * A 1% reduction in the headline corporate tax rate to 28% (from 29%)
    * R5-bn in tax subsidies over the next three years for labour-intensive industries and industrial policy
    * A simplified tax package for very small businesses with turnover of up to R1-m
    * Incentives for investment in venture capital (that is, investments in small high-growth, high-tech companies with an annual turnover of up to R14-m or gross assets of up to R7-m and/or junior mining and exploration companies with gross assets of R30-m to R50-m
    * Investments in general companies will qualify for a 30% up-front deduction, with annual deductions capped at R500 000 for individuals, R750 000 for corporations and R7,5-m for venture capital funds
    * Investments in junior mining companies will qualify for a 50% up-front deduction, with annual deductions capped at R1-m for individuals, and R10-m for corporations and venture capital funds
    * VAT registration threshold - R1-m (2007/8: R300 000)
    * A new electricity levy of 2 cents per kilowatt hour
    * Fuel (petrol and diesel) taxes to increase, from 2 April 2008, by 6c a litre
    * Road Accident Fund levy on petrol and diesel - 46,5c a litre (2007/8: 41,6c a litre)
    Sin tax increases:
    * A packet of 20 cigarettes will cost 66 cents more.
    * A 750 ml bottle of wine will cost 12 cents more.
    * A 340 ml can of beer will cost 5 cents more
    * A 750 ml bottle of liquor (spirits) will cost R2,17 more.

    Spending plans and proposals for 2008/9

    * R60-bn long-term loan to Eskom to finance power infrastructure
    * An additional R33,2-bn for provinces mainly for school education, health care, welfare services and roads
    * An additional R6,5-bn to municipalities for the extension of free basic services
    * An additional R12,5-bn for social grants

    o Old age pension, disability and care dependency grant - R940 a month (2007/8: R870 a month)

    o The child support grant - R210 a month from April 1, 2008 and R220 a month from October 1, 2008 (2007/8: R200)

    o Foster care grant - R650 a month (2007/8: R620)

    o The child support grant will be extended to children up to their 15th birthday in 2009

    o The age of eligibility for men to receive the old age pension will gradually be reduced to 60. Specifically, it will decline from 65 to 63 this year, to 61 in 2009, and to 60 in 2010.

    * An additional R9-bn in conditional grants for school building, HIV and Aids, hospital revitalisation and school nutrition
    * An additional R8,2-bn for public transport, roads and railway infrastructure
    * An additional R6-bn for housing, water and general built environment infrastructure
    * An additional R2-bn for 2010 FIFA World Cup Stadiums and related infrastructure
    * An additional R2,5-bn for industrial development and small, medium and micro enterprises
    * An additional R2,6-bn for agriculture and land reform
    * An additional R2,7-bn for information technology network infrastructure, police forensic laboratories and additional police personnel, and R2-bn for correctional facilities
    * An additional R1,4-bn for higher education, research and knowledge development
    * An additional R1-bn for programmes under the expanded public works umbrella.

    Got this from Moneyweb. A quick scan it looks good very good.
    moneyweb.co.zal
    Only stress when you can change the outcome!

  2. #2
    Platinum Member Chatmaster's Avatar
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    Agreed, it does seem to look good. I just wonder where all the money goes at the end of the day...
    An additional R33,2-bn for provinces mainly for school education, health care, welfare services and roads
    That is a lot of money that we never seem to notice.

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    Site Caretaker Dave A's Avatar
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    Trevor Manuel does a fine job. He's been my vote for Minister of the Year for quite a while now.

    This isn't good news, though.
    * GDP growth was 5% in 2007, it is projected to decrease to 4% in 2008, rising to 4,6% in 2010 (average over the period: 4,3%)
    And even then, there are some who might think he's being a tad optimistic.
    The trouble with opportunity is it normally comes dressed up as work.

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    Site Caretaker Dave A's Avatar
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    Hmm. The Rand has lost 3% today on the budget news. Is this really a good news budget?

    One thing seems clear, I'm not alone being sceptical of the 4% GDP growth estimate.
    The trouble with opportunity is it normally comes dressed up as work.

  5. #5
    Moderator IanF's Avatar
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    Small Business

    Looks like quite big changes for small business, any tax expert here to help us through this.
    Only stress when you can change the outcome!

  6. #6
    Site Caretaker Dave A's Avatar
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    Two notable points on the business front:

    Company tax down to 28%
    VAT threshold moved to R 1 million

    I haven't got to delving into the incentives, subsidies and the "simplified package" yet.
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member Chatmaster's Avatar
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    IT Web seems to have a good summary of that, HERE

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    Platinum Member Chatmaster's Avatar
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    Another handy link is this Pocket guide.

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    Email problem RKS Computer Solutions's Avatar
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    Thanks to everyone who got this info out so quickly!!!!

  10. #10
    Platinum Member Chatmaster's Avatar
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    Another good link is here at 702 very comprehensive and easy to read.

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