Budget 2013 Highlights

[Rafael]

http://www.fin24.com/Budget/Budget-in-a-nutshell-20130227

Cape Town - Finance Minister Pravin Gordhan clearly did not want to rock the boat in the rather conservative 2012/13 budget he unveiled in parliament on Wednesday.

Most South Africans - as well as the business community and financial markets - should be pleased with a budget which takes the National Development Plan as its point of departure, and included tax relief of R7bn for individual tax payers in a challenging economic environment.

The highlights in a nutshell include:

Budget deficit
The deficit is estimated higher, at 5.2% of gross domestic product (GDP) in 2012/13 (shortfall of R16.3bn). It is budgeted to come down to 4.6% in 2013/14 and 3.1% in 2015/16.

Growth and inflation
Economic growth has been adjusted slightly downward from last year's budget with estimated figures of 2.7% in 2013, 3.5% in 2014 and 3.8% in 2015.

Consumer inflation is expected to be stable at 5.7% in 2013, slowing to 5.5% in 2015.

Debt and loan service costs
Net loan debt is projected to reach 38.6% in 2013/14, and stabilise at just higher than 40% towards 2016. Debt service costs are expected to stabilise at 2.8% of GDP in 2012/13.

Revenue and spending
Total spending in 2013/14 is seen at R1 149.4bn or 32.6% of GDP, and total revenue at R985.7bn or 28.0% of GDP.

Personal tax
Individual tax payers will start paying tax at an annual income of R67 111 (R63 556 last year) for people below 65, R104 611 (R99 056) for persons 65 to 74 and R117 111 (R110 889) for persons over 75.

Individuals whose taxable income is only from a single employer and does not exceed R250 000 for the 2012/13 tax year are not required to submit tax returns.

Sin taxes
Excise duties on alcohol and tobacco products will go up between 5% and 10%. A packet of 20 cigarettes will cost 60c more and a 340 ml can of beer 7.5c more.

Fuel and environmental taxes
The general fuel levy will rise by 15c per litre to R2.13 on April 3 2013, and the Road Accident Fund levy by 8c/l to 96c/l of petrol.

The levy on plastic shopping bags will rise from 4c to 6c per bag from April 1 2013.

Social grants
The most important grants have all been raised by between 4% and 5%.

The old age grant will now be R1 260 per month and R1 280 for people over 75. The disability grant will now be R1 260, foster care R800, care dependency R1 260 and child support R290.

Medical schemes
Monthly tax credits for medical scheme contributions (reduction of tax payable) will be increased from R230 to R242 for the first two beneficiaries on a medical scheme, and from R154 to R162 for each additional beneficiary on the medical scheme for R2013/14.

Pension fund money
Proposals are considered which would require retirement funds to transfer members’ balances into a preservation fund when they change their employer.

Youth employment
A youth employment tax incentive aimed at encouraging firms to employ young workers will be tabled for consideration by parliament.

Infrastructure
Government will over the next three years invest R827bn into building new and upgrading existing infrastructure.

- Fin24

[Chrisjan B]

Infrastructure = Nkandla...

[Dave A]

And our exchange rate weakened on the news...

The problem as I see it is the combination of the deficit going the wrong way, and that Pravin is building a track record of consistently missing his projections on the wrong side.

Growth and inflation
Economic growth has been adjusted slightly downward from last year's budget with estimated figures of 2.7% in 2013, 3.5% in 2014 and 3.8% in 2015.

Consumer inflation is expected to be stable at 5.7% in 2013, slowing to 5.5% in 2015

Can our government deliver?

And more soberingly, even if they do deliver those modest targets, that sort of growth isn't going to produce much in the way of new jobs. Certainy not enough to meet JZ's advertised employment creation targets or quell the current feelings of socio-economic dissatisfaction that keep manifesting all over the place.

[Justloadit]

Increase in SIN taxes, road accident fund(why), plastic bags(why) and fuel(why), are there to bolster the income, and wait we still have not added the etolls into the equation. The plastic bag tax, is a pure income SARS, as none of the grand plans to use the money for recycling has materialised, so what the heck, just shove it into the government coffers. The road accident fund has been fraught with corruption, so now the tax payer must foot the bill for the theft, and the perpetrators have disappeared into the sunset with their pockets loaded with the stolen money. The fuel levy, 7c per litre for the payment of the pipe line, heck we been paying for this pipeline for for more than a decade, heck how much did it cost to install, more than the road upgrade around Johannesburg? Another 21c per litre for......

Whilst they have not directly affected individual "Income Tax" they certainly are affecting the value one gets for your Rand, effectively it is the same pine apple being shove in your as.. its just that they have added a lot more Vaseline. This is one way to get the poorest of the poor to contribute towards the tax pool, through the purchasing of essential services - one of them being transport, which affects every single item that we touch on a daily basis.

What they do not realise, is that the worse the economy performs, the less tax is collected, so to bolster the income increase the taxes again, and so the spiral continues.

The only way to fix this economy, is to fire any one who is even suspected of bribery and corruption, this will ensure that everyone keeps a damn clean nose, and replace department heads with managers who actually know what they are doing and manage the resources allocated to the department, and not squander it on themselves. If we continue as we are, then we are spiraling in to an abyss from which it will take decades to recover from.

[vieome]

The increase in fuel really means an increase in cost of all goods. Increase in cost of all goods means a larger tax revenue for govt.

[Justloadit]

exactly. A punitive form of increasing tax revenue!