By Nico Strydom
The national budget was recently announced and this is how it will affect your wallet.
Personal income tax and VAT
Tax notches and rebates are adjusted to above the inflation rate. This means that individuals with an annual increase in their salaries will not necessarily fall in a new tax notch and will therefore not have to pay more of their salary to tax. The tax threshold has also been increased, which means that only individuals who earn more than this threshold per annum will be levied for personal tax.
The so-called expat tax came into effect on 1 March and entails that South Africans working overseas will in future be taxed for the difference between the income tax they pay where they reside and what they would have paid locally. The first R1.25 million per annum earned overseas will be tax-free.
Specific excise duty on alcoholic beverages and tobacco products, the so-called sin tax, will increase by between 4.4% and 7.5%:
- Beer increases by 8c per 340 ml can
- Unfortified wine increases by 14c per 750 ml bottle
- Fortified wine increases by 23c per 750 ml bottle
- Sparkling wine increases by 61c per 750 ml bottle
- Apple cider and alcoholic fruit beverages increase by 8c per 340 ml can
- Alcoholic spirits increase by R2.89 per 750 ml bottle
- Cigarettes increase by 74c per packet of 20
- Cigarette tobacco increases by 82c per 50g
- Pipe tobacco increases by 40c per 25g
- Cigars increase by R6.73 per 23g
Levies on fuel rise by 25c per litre in total. The general fuel levy increases by 16c per litre on 1 April 2020 and the road accidents fund levy by 9c per litre. After the increases the general fuel levy will be R3.70 per litre fuel, and R3.55 per litre diesel. The road accidents fund levy for both petrol and diesel will be R2.07 per litre.
Sugar tax remains unchanged at 2.21c per gram per 100 ml cooldrink. Sugar tax came into effect in April 2018. The basic exemption means that the first 4 grams of sugar per 100 ml cooldrink is tax-free.
Levy on plastic bags and tax on light bulbs
The levy on plastic bags increases significantly from 12c to 25c per bag as from 1 April. The levy on ordinary light bulbs increases with R2 to R10, while energy-saving light bulbs will not be taxed.
Tax on vehicles
Carbon dioxide tax will increase by 5.6% from R120 per ton carbon dioxide to R127 per ton. The tax on green house emissions by vehicles is increased to R120 per gram carbon dioxide for passenger cars and to R160 for double-cab vehicles.