The Minister of Finance, Malusi Gigaba, delivered the much-anticipated budget speech for this year on 21 February 2018. The main goal of this year’s budget was to find a way to address the revenue short fall and fund fee-free higher education and training. Over the next 3 years an amount of R57 billion will be allocated to fee-free higher education and training budget.
To simplify the budget, we have decided to highlight 5 main points that will impact the consumer this year:
Value-added-tax (VAT) increased from 14% to 15% and the effective date is 1 April 2018.
The increase in VAT is expected to bring in additional revenue of R22,9billion which is also the largest contributor to indirect taxes generated. The last VAT increase was in 1993.
The VAT increase will result in an automatic increase in inflation.
Estate duty increased from 20% to 25% for estates greater than R30million and the effective date is 1 March 2018.
Revenue of R150million is expected to be generated by this increase and will mostly affect wealthy individuals.
Increase in the ad-valorem excise duty rate on luxury goods from 7% to 9% and estimated to generate revenue of R1,03billion.
The effective date is 1 March 2018. Examples of luxury goods are cosmetics, perfumes, electronics, etc.
The fuel levy increases by 22c per litre and the Road Accident Fund levy by 30c per litre which result in a total increase in fuel cost of 52c and the effective date is 4 April 2018.
The general fuel levy will add an estimated R1,22billion to the revenue.
Everyone will be affected by this increase no matter which type of transport they use.
Excise duties on alcohol and tobacco will increase between 6% to 10% and the effective date is 1 April 2018.
R1,33billion is estimated to be added to the revenue for indirect taxes. The main goal of this annual increase by the government is to promote healthy living.
Breakdown of increases as follows:
Beer/Ciders 340ml can
|Wine per litre||23c|
|Box of 20 cigarettes||R1,22|
The SARS pocket guide can be downloaded here: