The news is in. On the 21st of February 2018, Finance Minister Malusi Gigaba delivered the South African 2018 Budget Speech. And apart from explaining where the money will be spent, he also went into detail about where the State will get money, namely taxes. And although the Rand is doing significantly better, we have holes to fill. In fact, the wholes add up to about R36 billion.
So, how will government’s plans affect you in the next financial year?
- Most of the changes will take effect between the 1st of March and the 1st of April 2018.
- VAT went up from 14% to 15%. This change will increase the cost of goods, although the 19 zero-rated food staples such as maize meal, brown bread and rice will stay unchanged.
- Excise duty on luxury goods will increase from 7% to 9%. These goods include items such as golf balls, electronics and cosmetics.
- An ad valorem excise duty on vehicles (high-end) will increase to 30%, and VAT on (regular) vehicle prices will increase by 7.1%.
- Estate duty will increase to 25% on properties worth more than R30 million.
- While the bottom three personal tax brackets will be adjusted to compensate for inflation, the four top brackets won’t change. This means that the higher income sector will carry the tax burden.
- On the 4th of April, fuel levies are increasing by a total of 52c per litre, 30c of which will go to the Road Accident Fund. Thus, the fuel price will increase on the first Wednesday in April.
- Medical tax credits will increase by 2.3% for the main member and the first beneficiaries and by 2.5% for the remaining beneficiaries.
- Sin tax, as always, will be increasing. Tobacco products will increase by 8.5% and alcohol with between 6% and 10%.
- Sugar was also not left behind. Sugary drinks will be taxed with 2.1c per gram over the 4 g per 100 ml limit. The sugar content of a 340 ml can of popular soda is about 10 g per 100 ml.
- The carbon emission tax will increase by 20%, which means you’ll pay about R1 000 more for a small car and R10 000 more for bigger cars.
- You will also pay more for a plastic bag as they will be taxed by up to 12c extra per bag.
- Incandescent light bulbs (regular) will now cost R2 more than normal. Hence, it’s time to switch to the energy efficient ones.
This all means we must pay more attention to how we consume. There is a focus on being environmental-friendly and being more health-conscious. Hence, we need to be cognisant of our spending habits.
Besides keeping your vehicle safe and sound, we’re also continuously searching for ways to improve your daily life. Thus, we’ve created a tax logbook that’s hosted on your Safe and Sound app. It will make things easier when you submit tax returns or claim back travelling funds from the office. Call 0860 12 24 36 or visit www.netstar.co.za to find out how Netstar’s Safe and Sound app can ease your life.