The 2019 Budget Speech
The finance minister delivered the annual budget speech on the 20th of February 2019. Below we highlight some of the most important changes which we believe will more directly affect you.
The minister of finance announced that the tax-free threshold for those under 65 years old would be increased to R79 000 per year, resulting in a total increase of R850 per year. Individual taxpayers earning income above the new threshold of R79 000, will effectively be paying more taxes due to inflation as there was no provision for this.
Taxpayers that are between 65 and 75 years old will have a tax-free threshold of R122 300 before being liable for taxes. Taxpayers that are over 75 years old, will have a tax tax-free threshold of R136 750.
The maximum tax rate of 45% remains unchanged for those earning above R1,500,000.
The following taxes and tax credits remain unchanged for 2019/2020
- Capital gains tax
- Dividends tax
- Estate tax and donations tax
- Interest and investment exemption
- Medical Tax credits
- Lump sum pay-outs
A can of beer will now cost you an extra 12c, a bottle of spirits an extra R4.54 and a bottle of wine between 22c and 84c extra per litre. A pack of 20 Cigarettes will now cost an extra R1.14. Road accident fund levies will increase by 5c and fuel levies will increase by 15c a litre from 1 April. Further to this, government introduced a new fuel carbon levy to take effect from 05 June this year. The levy will be 9c per litre on petrol and 10c per litre on diesel.
Some good news…
Sars new commissioner
SARS will be receiving a new commissioner. This, in addition to SARS strengthening its IT systems will hopefully result in a more effective and efficient SARS.
White bread flour, cake flour, and sanitary pads will be zero-rated for VAT purposes from 1 April 2019.
Social grant payments
R567bn has been allocated for social grant payments in the coming fiscal year. Old age, disability, war veterans and care dependency grants will be increased by R80 a month; foster care grants will be increased by R40 to R1,000 and the child support grant will be increased to R420 in April and R430 in October.
Data costs must fall!
The Minister was insistent that the cost of data must fall. In this regard, he has promised to work with the relevant personnel to ensure this happens. By reducing data costs, it will create a greater opportunity for entrepreneurs, especially those from the SME sector, to grow their businesses. This will in turn promote economic growth.
Over R30 billion is being allocated to build new schools and to maintain schooling infrastructure. An additional R2.8 billion will be used to replace pit latrines in 2 400 schools. More than R111 billion will be spent to fund university and technical college education for 2.8m students from poor and working-class backgrounds.
To view the full budget speech you can go to http://www.treasury.gov.za/documents/national%20budget/2019/speech/speech.pdf
Article written by Yasteel Sooklal
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