Good News Budget

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  • IanF
    Moderator

    • Dec 2007
    • 2680

    #1

    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!
  • Chatmaster
    Platinum Member

    • Aug 2006
    • 1065

    #2
    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.
    Roelof Vermeulen (Entrepreneurship in large organizations)
    Enterprise Art Management Software| Rock flaps south africa

    Comment

    • Dave A
      Site Caretaker

      • May 2006
      • 22806

      #3
      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.
      Participation is voluntary.

      Alcocks Electrical Services | Alcocks Pest Control & Entomological Services | Alcocks Hygiene Services

      Comment

      • Dave A
        Site Caretaker

        • May 2006
        • 22806

        #4
        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.
        Participation is voluntary.

        Alcocks Electrical Services | Alcocks Pest Control & Entomological Services | Alcocks Hygiene Services

        Comment

        • IanF
          Moderator

          • Dec 2007
          • 2680

          #5
          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!

          Comment

          • Dave A
            Site Caretaker

            • May 2006
            • 22806

            #6
            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.
            Participation is voluntary.

            Alcocks Electrical Services | Alcocks Pest Control & Entomological Services | Alcocks Hygiene Services

            Comment

            • Chatmaster
              Platinum Member

              • Aug 2006
              • 1065

              #7
              IT Web seems to have a good summary of that, HERE
              Roelof Vermeulen (Entrepreneurship in large organizations)
              Enterprise Art Management Software| Rock flaps south africa

              Comment

              • Chatmaster
                Platinum Member

                • Aug 2006
                • 1065

                #8
                Another handy link is this Pocket guide.
                Roelof Vermeulen (Entrepreneurship in large organizations)
                Enterprise Art Management Software| Rock flaps south africa

                Comment

                • RKS Computer Solutions
                  Email problem

                  • Apr 2007
                  • 626

                  #9
                  Thanks to everyone who got this info out so quickly!!!!

                  Comment

                  • Chatmaster
                    Platinum Member

                    • Aug 2006
                    • 1065

                    #10
                    Another good link is here at 702 very comprehensive and easy to read.
                    Roelof Vermeulen (Entrepreneurship in large organizations)
                    Enterprise Art Management Software| Rock flaps south africa

                    Comment

                    • Don
                      Suspended
                      • Feb 2008
                      • 10

                      #11
                      I think it was a fairly Good one, I mean its "Business Friendly", brings tax relief, reduced corporate taxes, financial support for Eskom's programme to build power stations, a new electricity levy, more social spending and a boost for job creation.

                      If the DA sais yes to it then it was a good one, I listen to some of our Political Leaders commenting on it and most said it was a faily good budget given the circumstances and I agree. The statu quo in the Political fratenity made things difficult for the current government to function properly but Trevor pulled it off despite the circumstances.

                      Most importantly "Hope was restored", it offered hope for better times ahead...We are in this Together.

                      Comment

                      • IanF
                        Moderator

                        • Dec 2007
                        • 2680

                        #12
                        What worries me is if the DA like something the ANC run a mile, but it is changing since Tony Leon stepped down.
                        Only stress when you can change the outcome!

                        Comment

                        • duncan drennan
                          Email problem

                          • Jun 2006
                          • 2642

                          #13
                          Does anyone know what date the VAT registration limit will change on?

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                          Comment

                          • Dave A
                            Site Caretaker

                            • May 2006
                            • 22806

                            #14
                            Are you planning to deregister, Duncan?
                            Participation is voluntary.

                            Alcocks Electrical Services | Alcocks Pest Control & Entomological Services | Alcocks Hygiene Services

                            Comment

                            • duncan drennan
                              Email problem

                              • Jun 2006
                              • 2642

                              #15
                              We recently sent the forms in for my wife's business, but she would prefer not to have to worry about it.

                              I gave them a call, and they said it will only change in 2009.

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                              Comment

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