Finance Minister Enoch Godongwana delivered his second national budget speech on Wednesday, 22 February, outlining the National Treasury’s fiscal strategy for the upcoming year.
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The minister said he was confident that the strategy would be able to meet the country’s financial needs, protect social wages, and keep a positive balance sheet without having to borrow too much money or raise taxes.
The National Treasury says that South Africa’s GDP growth will be less than 1% in 2023. This is because of frequent and long-lasting power outages, a weaker global economy, and rising inflation. The Treasury emphasised how important a reliable power supply is for any possible turnaround in growth and said that a big chunk of this year’s budget is going to fix problems with Eskom.
Without a dependable source of electricity, the country’s economy cannot grow. The National Treasury has recognised this critical issue and has allocated significant resources to address it. The country’s power supply problems have been ongoing and have had a detrimental impact on businesses and consumers alike. The treasury’s focus on Eskom in this year’s budget demonstrates the government’s commitment to resolving this issue and laying the groundwork for future economic growth.
The highlights for this year are:
- Granting tax relief by adjusting personal income tax brackets and rebates for the effect of inflation
- An expanded tax incentive for businesses of 125% of the cost of renewable energy assets used for electricity generation, brought into use during a period of two years from 1 March 2023
- A tax rebate to individuals for solar PV panels of 25% of the cost for a limited period, subject to certain conditions, and capped at R15,000 per individual
- Adjustments to tax tables for transfer duty, retirement fund lump sum benefits and retirement fund lump sum withdrawal benefits, for the effect of inflation
- Increases of 4.9% in excise duties on alcohol and tobacco
- No changes to be general fuel levy and road accident fund levy
- The increase of the health promotion levy on beverages to 2.3 cents per gram of sugar is delayed until 1 April 2025.
Here is the complete impact of the Budget 2023.
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Picture: Enoch Godonqwana / Facebook