Minister of Finance, Tito Mboweni, on Wednesday tabled a R2.03 trillion budget for the 2021/22 financial year in Parliament.
Mboweni said most of the tips he received on the budget spoke about the limits to increased taxation and allocation of funds to the country's fight against COVID-19.
"We are allocating more than R10 billion for the purchase and delivery of vaccines over the next two years. We increased the contingency reserve from R5 billion to R12 billion to make provision for the further purchase of vaccines and to cater for other
Emergencies,” the Minister said.
“Main budget revenue is projected to be R1.35 trillion, or 25.3% as a share of Gross Domestic Product (GDP) in 2021/22. This rises to R1.52 trillion in the outer year (2023/24) of the Medium-Term Expenditure Framework (MTEF). At the same time, non-interest spending will remain steady at approximately R1.56 trillion over the next three years, but will decline as a share of GDP from 29.2 per cent in 2021/22 to 26.2% of GDP in 2023/24,” said Mboweni.
The Minister said government expects to collect R1.21 trillion in taxes during the 2020/21 financial year, R213 billion less than the 2020 Budget expectations.
“The corporate income tax rate will be lowered to 27 per cent for companies with years of assessment commencing on or after 1 April 2022. The personal income tax brackets will be increased by 5 per cent, which is more than inflation. This will provide R2.2 billion in tax relief. This means that if you are earning above the new tax-free threshold of R87 300, you will have at least an extra R756 in your pocket after 1 March 2021," he said.
Fuel levies will increase by 27 cents per litre, comprising 15 cents per litre for the general fuel levy, 11 cents per litre for the Road Accident Fund levy and 1 cent per litre for the carbon fuel levy, said Mboweni.
Government has allocated a R30 increase for the old age, disability and care dependency grants to R1890, R30 increase in the war veterans grant to R1910.3, a R10 increase in the child support grant to R460 and R10 increase for the foster care grant to R1050.