TAX
- Real tax relief for individuals. Tax brackets will be adjusted, and personal income tax rebates increased.
- Booze and smokes will be taxed a further 4.4%-7.5%, with the exception of traditional African beer, which will be taxed 4.4% less.
- The fuel levy will rise by 25c.
- The plastic bag levy rises from 12c to 25c a bag.
- Corporate tax does not change.
- No change to VAT.
GOVERNMENT REVENUE and GROWTH
- 78% of government income comes from taxes, 20% from borrowing, 2% other.
- Tax revenue will be R63.3-billion less than estimated in October 2019.
- The economy grew by 0.3% in 2019, and is projected to grow by 0.9% in 2020.
GDP and DEBT
- Debt is not going to stabilise over the medium term.
- Debt service costs absorb 15.2% of government revenue, up from 10%.
- The Budget deficit (the difference between spending and revenue that has to be made up through borrowing) has risen to 6.8% of GDP.
- Thus, borrowing will rise to R432.7-billion in 2019/20.
- Thus, gross debt will rise from R3.18-trillion in 2019/20 to R4.4-trillion or 71.6% of GDP by 2022/23.
SPENDING and SAVING
- The government will spend R1.54-trillion in 2020/21.
- This excludes debt service costs of R229-billion, almost equivalent to the budget for education this year.
- R60-billion has been set aside for Eskom and SAA over the next three years.
- Expenditure will be cut by R261-billion over three years.
- Of this, R160-billion will be cut from the public sector wage bill. DM
