This year’s Budget was firmly focussed on the energy State of Disaster with the most prominent announcement being that the government would take over R254 billion of Eskom’s debt subject to stringent conditions. Two tax relief measures totalling R9 billion were also introduced to assist individuals and businesses to invest in solar and renewable alternatives. As a result of this and an improvement in revenue, there were no major tax proposals in the Budget.
“While the respite from tax increases and the tax relief from adjusted tax brackets and rebates for individual taxpayers was welcomed, the increases in sin taxes were expected,” says Sue Blake, head of the PCF tax team.
Finance Minister, Enoch Godongwana, referred to the 2023 Budget as “not an austerity budget but a budget that makes tough trade-offs in the interests of the country’s short and long-term prosperity.”
Of the tax relief amounting to R13 billion, R9 billion of this is earmarked to encourage households and businesses to invest in renewable energy. More specifically, R4 billion in relief is provided for households that install solar panels and R5 billion to companies through the expansion of the existing renewable energy incentive. The snapshot below provides a picture of the sources of government income and spending in 2023/24. Budget 2023 People’s Guide.
Budget announcements that will impact you personally.
A new tax incentive to install rooftop solar panels: For one year from 1 March 2023, individuals can claim a rebate of 25% of the cost of installing rooftop solar panels, up to a maximum of R15 000, to reduce their tax liability in the 2023/24 tax year.
The personal income tax brackets will be fully adjusted for inflation, increasing the tax-free threshold from R91 250 to R95 750.
Monthly medical tax credits will increase by inflation to R364 for the first two members and to R246 for additional members.
The retirement tax tables for lump sums withdrawn before retirement and at retirement will be adjusted upwards by 10%, increasing the tax-free amount at retirement to R550 000.
Revised draft legislation on the ‘two-pot’ retirement system will be published, including the amount immediately available at implementation, from 1 March 2024. Withdrawals from the accessible “savings pot” will be taxed as income in the year of withdrawal.
Social grants will increase in line with CPI inflation. The R350 grant will continue until 31 March 2024.
Excise duties on alcohol and tobacco increase by 4.9% in line with expected inflation. Consumers can expect the following price hikes: ➢ 340ml can of beer will increase by 10c
➢ 750ml bottle of wine will increase by 18c
➢ 750ml bottle of spirits will increase by R3.90
➢ 23g cigar will increase by R5.47
➢ a pack of 20 cigarettes will increase by 98c
Budget announcements that will impact individuals and businesses.
The general fuel levy and the Road Accident Fund levy will not increase this year, which will provide R4 billion in tax relief. However, the carbon fuel levy will increase by 1c to 10c/l for petrol and 11c/l for diesel from 5 April 2023.
The health promotion (sugar) levy remains unchanged for the next two fiscal years.
The brackets of the transfer duty table will increase by 10%, allowing properties below R1.1 million to avoid transfer duty payments.
“Each year The Budget contains technical amendments that may affect you or your business and will require professional advice. If you would like a bullet list/summary of the 2023 Budget announcements that will impact your business, please contact us and we will gladly email it to you. As your taxes remain government’s main source of income, it’s advisable to speak to a tax professional who can advise you on how your tax affairs may be impacted,” advises Blake.
The PCH Tax Guide provides a detailed breakdown of the 2023 Budget - please visit... https://www.privateclient.co.za/_files/ugd/e2be5b_78c1f8f2bc0c429097a02590c386d1c9.pdf If you need advice or assistance with your tax