How the Budget affects your pocket

Listening to the budget speech always feels like that conversation where someone starts out saying, “I’ve got good news and I’ve got bad news”. Finance Minister Tito Mboweni’s budget speech did not change this tried-and-tested good cop / bad cop script, but it was at least punctuated by some humour and levity.

So, how does the budget affect you, the taxpayer? Well, which do you want to hear first, the good or the bad news?

 

The Bad News

Fuel

The financial pressure that tax payers have been subjected to for the last few years is not going to let up just yet. This is in part because of the challenges facing Eskom which and an economy still weak at the knees from a few tough years.

Just when we got used to the last drop in petrol price, and we actually started going for a Sunday drive again, this happens. Petrol is now going to cost 15 c per litre more, then there is an additional 5 c a litre levy to the Road Accident Fund and a carbon fuel levy of another 9 c. So, all in its a 29 c increase on petrol and 30 c per litre on diesel. Ouch!

Personal Income Tax

The increases in tax thresholds and rebates are so small as to be insignificant for individual tax payers, with no inflationary adjustments on personal income tax rates. This is not great since, if you get an annual increase in line with inflation you will pay more tax.

Medical Schemes

The amount you can deduct every month for your medical aid contribution has not been changed, so if your medical aid’s membership fee increases you are going to have to pay more.

Sugar Tax

Continuing with the so-called ‘health promotion levy’ which was introduced in 2018, Government has increased the levy by 20 cents for any drink that contains more than 4% sugar per every 100 ml’s.

 

The Good News

If you’re a first-time buyer, there is some really good news. Government has put aside R 950 million (over 3 years) to help subsidise the purchase of your first home. To find out more, look out for a national marketing campaign which is set to launch soon.

As Minister Mboweni put it, “… art and culture is an expression of our soft power and our heritage”, so apart from putting money aside for a new National Theatre and Museum, there is also money set aside to lend greater support to the National Archives, a National Orchestra and Ballet Company.

 

The not so ugly…

So, while on the face of it there may not seem to be much to smile about for the man-in-the-street, it is good to see the Government’s focus shifting back to curbing SOE spending and getting the fundamentals back in place.

 

The take-away?

You cannot change anything about the country’s Budget, but you can change your personal budget.

If you need help, speak to us.

Kudough Credit Solutions

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