With many households and businesses still under financial pressure, National Treasury will not be increasing taxes to keep money in the taxpayer’s pocket.

Finance Minister Enoch Godongwana said this when he tabled his maiden budget speech before a sitting of Parliament on Wednesday.

“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,” he said.

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.

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 the age of 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 from R224 to R234 per month for additional members;
• The employment tax incentive will be expanded through 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.”

Godongwana said there will also be no increase in the Road Accident Fund levy.

“[Mineral Resources and Energy] Minister [Gwede] Mantashe and I 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.”

Source: South African Government News Agency