What South Africans would do in Tito’s shoes. Plus the Budget Speech in a nutshell

Budget Insurance recently conducted a survey, asking South Africans what they would spend our national budget on. Not a Covid-19 vaccine tax – according to 63.7% of respondents. Luckily, they were not disappointed with the release of the 2021/22 National Budget.

The good news is that the Covid-19 vaccinations will be rolled out in three phases over the next year and R9 billion has been ringfenced for this purpose.

According to the survey, Mzansi also thought that Finance Minister, Tito Mboweni, should focus on job creation, health, education and fixing potholes.  Again, the Minister didn’t disappoint.  The respondents who wanted more money spent on health will be pleased with the R248.8 billion total health allocation.

Other good things to know

At an individual level, medical tax credits will increase from R319 to R332 for the first two members, and from R215 to R224 for any other members. So, if you are the main member with your spouse and two children as dependants on your medical aid membership, you will receive an annual tax credit of R13 032.

Job creation

The total funding for employment creation is now sitting at nearly R100 billion. This is in response to the job creation targets for young people, outlined by the President.

Education

Mboweni allocated R402.9 billion towards education, with the bulk of R255 billion going to basic education, followed by R45.6 billion towards university transfers. National Treasury is working with the Department of Higher Education and Training on policy and funding options to ensure deserving students are supported through higher education.

Tax bracket relief

The Minister kicked off the Budget noting that while South Africa is in a better financial position than October last year, “we owe a lot of people a lot of money”.

Despite this precarious financial position and the costly strain of funding the Covid-19 vaccines, he still managed to give you some tax relief without introducing a dreaded vaccine tax.

The personal income tax brackets will see an above-inflation increase of 5%, providing a collective R2.2 billion in tax relief. If you earn more than the new tax-free threshold of R87 300 (R7 275), you will have an extra R756 in your pocket from Monday, 1 March.

Indulgences will cost a pretty penny

If you’ve been looking forward to a relaxing night in, prepare to dig deeper into your pockets than before. Mboweni noted that consumers tend to respond to price increases (rather than government-enforced bans) and the higher prices should lead to lower alcohol consumption levels.

An 8% increase in the excise duties on alcohol and tobacco products means: 

• 340ml can of beer or cider - up 14c
• 750ml bottle of wine - up 26c
• 750ml bottle of sparkling wine - up 86c
• A bottle of 750 ml spirits such as whiskey or vodka - up R5.50
• A packet of 20 cigarettes – up R1.39
• 25g of piped tobacco – up 47c
• A 23g cigar – up R7.71

Fuel taxes speed up from 7 April

The 27 cents a litre increase in the fuel levy will push up your petrol costs as a driver as well as taxi and bus fares if you are a commuter. The increase can be broken down further into increases of 15 cents for the general fuel levy, 11 cents for the Road Accident Fund and one cent more for the carbon fuel levy.

So, there you have it – what was said by Mzansi, what was said by Tito and what the Budget Speech really means for you.