“Today’s budget is constrained by the need to consolidate our public finances, in the context of slower growth and rising debt.” said Minister of Finance, Nhlanhla Nene.
Giving the budget speech was a far from enviable job in light of the huge government spending deficit that needs to be recovered. The speech was a short 26 pages long, but what every person on the street wants to know is: How will this affect me?
Remember, the speech was 26 pages long and contained numerous areas of address, here are four key points that I’ve decided to highlight for you – it is not a comprehensive review of the budget speech.
INCOME TAX FOR 2015
- If you earn less than R181 900 a year then you will pay less tax.
- If you earn R200 000 a year, you will pay R21 more per month.
- If you earn R500 000 a year, you will pay R271 more per month.
- and at R1.5 million a year the tax increase is R1105 a month.
The amount that an individual can earn before they are required to pay tax has been increased for the tax year that runs from 1 March 2015 to 29 February 2016. For those below the age of 65 it is R73 650, ages 65 and over can earn R114 800 and those aged 75 and over can earn R128 500 without being required to pay tax.
The rebate for individual taxpayers has also gone up. Primary, for all taxpayers is R13 257. Secondary, for those aged 65 and over is R7 407 and tertiary, for those aged 75 and above is R2 466.
SOCIAL GRANTS The Old Age Grant (60+), Disability Grant and Care Dependency Grant have been increased to R1 410. The State Old Age Grant (75+) and the War Veterans Grant have been increased to R1 430. While the Foster Care Grant was increased to R860 and the Child Support Grant was increased to R330.
FUEL LEVY The price of fuel will increase overall by 80.5 cents. This consists of a General Fuel Levy increase of 30.5 cents per litre with the balance of the increase contributing towards the Road Accident Fund.
SIN TAX Excise duties on alcoholic beverages will increase by between 4.8% and 8.5% (especially beer, sparkling wine and spirits). Malt beer is set to increase by 7c per 340ml can, sparkling wine by 48c per 750ml bottle and spirits by R3,77 per 750ml bottle. Cigarettes have also received an increase of 82c per pack of 20 and cigars increased by R3,09 per 23g.
The increased fuel levy is going to impact all of us, affecting not only the fuel in our car but also the cost of delivering produce and thus affecting the price of all goods. After the petrol price rise in March and another rise coming in April we are really going to have to buckle down on our personal budgeting, while also avoiding those vices of excess that sin tax is substantially increasing.
Need some financial advice? I can help you out, let’s get in touch!