Blog


2018-02-21
BUDGET SPEECH / POLICY STATEMENT HIGHLIGHTS


1. WHERE WE ARE

 

The 2017 GDP growth projection has been revised upward to 1%, which is higher than the 0.7% expected at the time of MTBPS last year.
Growth is expected at 1.5% in 2018, rising to 2.1% in 2020.
Government faces revenue gap of R48.2 billion in the current year

 

2. TAX PROPOSALS

New tax measures will raise an additional in 2018/19, mainly through a higher VAT rate and below-inflation adjustments to personal income tax brackets

An increase in the value-added tax rate from 14% to 15% (an additional R36 billion),

A below inflation increase in the personal income tax rebates and brackets, with greater relief for those in the lower income tax brackets,

An increase in the ad-valorem excise duty rate on luxury goods from 7% to 9%,

A higher estate duty tax rate of 25% for estates greater than R30 million,

A 52 cents per litre increase in the levies on fuel, made up of a 22 cents per litre for the general fuel levy and a 30 cents per litre increase in the Road Accident Fund Levy, and

Increases in the alcohol and tobacco excise duties of between 6 and 10 percent.

 

3. HOW IT WILL BE SPENT:

Consolidated spending will increase from R1.67 trillion in 2018/19 to R1.94 trillion, representing a nominal annual average growth of 7.6%, or 2.1% in real terms.

 

Education – R792 billion,

 

Health – R668 billion

 

Social Grants - R528
• The Old age, disability and care dependency grants will increase on 1 April 2018 from the existing R1600 by R90 to R1690 and by a further R10 to R1700 on 1st October 2018.
• The Child Support grant will increase from the baseline of R380 to R400 on 1 April and to R410 on 1 October. This is 6.6% annual increase

 

Peace and Security – R200 billion

 

Economic Development – R200 billion

 

For the full Budget Speech / Policy Statement: https://www.moneyweb.co.za/in-depth/budget/read-the-complete-2018-budget-speech/