Finance Minister Enoch Godonwana didn’t announce any major new tax proposals in his budget speech, but there is some tax relief on the cards.

This is as tax revenue collections for 2022/23 are expected to total R1.69 trillion. This exceeds the 2022 Budget estimate by R93.7 billion, and the 2022 MTBPS estimate by R10.3 billion.

Over the medium-term, revenue projections are R6 billion higher than the estimates of the 2022 MTBPS.

Godongwana says the improvement in revenue is due to higher collection in corporate and personal income taxes, and customs duties. This partially offset the lower value-added tax estimates.

Tax relief of R13 billion

In addition to the tax measures to promote investments in renewable energy, the general fuel levy and the Road Accident Fund levy will not be increased this year.

To ease the impact of the electricity crisis on food prices, the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, will be extended to manufacturers of foodstuffs.

This takes effect from 1 April 2023 for two years.

Personal income tax

The personal income tax brackets will be fully adjusted for inflation, which will increase the tax-free threshold from R91 250 to R95 750.

In essence it means if you earn less than R95 750 per year – or about R7980 per month, you will not pay any tax.

Medical tax credits will also be increased by inflation, to R364 per month for the first two members, and to R246 per month for additional members.

The retirement tax tables for lump sums withdrawn before retirement, and for lump sums withdrawn at retirement, will be adjusted upwards by 10%. This means that the tax-free amount that can be withdrawn at retirement increases to R550 000.

The brackets of the transfer duty table will also be increased by 10%, allowing properties below R1.1 million to avoid any transfer duty payments.

The research and development tax incentive will be extended for 10 years, and will be refined to make it simpler and more effective.

The urban development zone tax incentive will also be extended, by two years, to allow for the review of the incentive to be completed.

Retirement system

After further consultations, the government intends to publish revised draft legislation on
the ‘two-pot’ retirement system. This will include details on the amount that could be immediately available when the system is implemented from 1 March 2024.

Any withdrawals from the accessible “savings pot” would be taxed as income in the year of withdrawal.

After a review and consultation last year, and taking into account the impact of the Upstream Petroleum Resources Development Bill, the minimum royalty rate for oil and gas companies will be increased to 2%. The maximum rate of 5% remains unchanged.

Sugar tax unchanged

Due to the difficult operating environment for the sugar industry from the impact of flooding and social unrest, the health promotion levy will remain unchanged for the following two fiscal years, to enable the industry to diversify or restructure.

Sin taxes

Government proposes an increase in the excise duties on alcohol and tobacco of 4.9%, in line with expected inflation.

This means that the duty on:

• A 340 millilitre can of beer increases by 10 cents,
• A 750 millilitre bottle of wine goes up by 18 cents,
• A 750 millilitre bottle of spirits will increase by R3.90,
• A 23 gram cigar by R5.47,
• And on a pack of 20 cigarettes, the duty rises 98 cents.