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As numerous households and businesses still find themselves under financial pressure following 2020, The National Treasury affirmed that it would not increase taxes this year. This will ensure taxpayers don’t have to reach deeper into their pockets during trying times.
Finance Minister Enoch Godongwana, during his budget speech before Parliament on Wednesday, 23 February 2022, stated the following. “Households and businesses are still under financial pressure and are coping with higher obligations, the effects of COVID-19 and increased fuel prices. Now is not the time to increase taxes and put the recovery at risk. Accordingly, we have decided to keep money in the pockets of South Africans.”
The proposal in the budget includes R5.2 billion in tax relief to help support economic recovery, provide some respite from fuel tax increases, and boost incentives for youth employment.
Moreover, the National Treasury tax proposals for 2022/23 are as follows:
- The personal income tax brackets and rebates will be adjusted by 4.5%, in line with inflation. The adjustments will mean that the annual tax-free threshold for a person under 65 will increase from R87 300 to R91 250.
- Medical tax credits will increase from R332 to R347 per month for the first two members and R224 to R234 per month for additional members.
- The employment tax incentive will be expanded by a 50% increase in the maximum monthly value to R1 500. It is anticipated that the expansion will provide additional support worth R2.2 billion.
“In 2021, the inland petrol price breached R20 per litre. The higher prices have put pressure on the cost of transport, food and other goods and services. To provide some relief to households, no increases will be made to the general fuel levy on petrol and diesel for 2022/23. This will provide tax relief of R3.5 billion to South Africans,” the Finance Minister added.
Godongwana said there would also be no increase in the Road Accident Fund levy.
He claims that he and the Mineral Resources and Energy Minister, Gwede Mantashe, have agreed that a review of all aspects of the fuel price is needed. “Our teams have already begun to engage on this critical work.”
With a certain degree of relief on the table, what are your thoughts on the matter?
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