#BUDGET2020

Budget in a Box

By Sasha Planting 26 February 2020
Caption
Minister of finance Tito Mboweni speaks to journalists at a media briefing prior to delivering his budget speech in parliament on 26 February 2020 in Cape Town, South Africa. (Photo: Leila Dougan)

What you need to know about #Budget2020

TAX

  1. Real tax relief for individuals. Tax brackets will be adjusted, and personal income tax rebates increased.
  2. 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.
  3. The fuel levy will rise by 25c.
  4. The plastic bag levy rises from 12c to 25c a bag.
  5. Corporate tax does not change.
  6. No change to VAT.

GOVERNMENT REVENUE and GROWTH 

  1. 78% of government income comes from taxes, 20% from borrowing, 2% other.
  2. Tax revenue will be R63.3-billion less than estimated in October 2019.
  3. The economy grew by 0.3% in 2019, and is projected to grow by 0.9% in 2020.

GDP and DEBT

  1. Debt is not going to stabilise over the medium term.
  2. Debt service costs absorb 15.2% of government revenue, up from 10%.
  3. The Budget deficit (the difference between spending and revenue that has to be made up through borrowing) has risen to 6.8% of GDP.
  4. Thus, borrowing will rise to R432.7-billion in 2019/20.
  5. 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

  1. The government will spend R1.54-trillion in 2020/21.
  2. This excludes debt service costs of R229-billion, almost equivalent to the budget for education this year.
  3. R60-billion has been set aside for Eskom and SAA over the next three years.
  4. Expenditure will be cut by R261-billion over three years.
  5. Of this, R160-billion will be cut from the public sector wage bill. DM
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