On 22 February 2023, the Minister of Finance, Enoch Godongwana, delivered his 2023 budget speech in parliament. It was no surprise that Eskom and blackouts topped the agenda. The minister announced R5 billion to help businesses pay for renewable energy solutions, such as solar panels. He also announced that registered taxpayers can claim 25% of the cost of solar panels, up to a maximum of R15 000, in the tax year that starts on 1 March 2023. While it may not seem that much, it is encouraging that Government is supporting South Africans to play a role in resolving the energy crisis.
Treasury will also keep Eskom going by taking on a huge R254 billion of Eskom’s debt.
Minister Godongwana furthermore announced that the R350 per month social relief of distress grant will continue for another 12 months, while all other grants were increased to keep up with inflation. The same was done for personal income tax brackets. As a result, people earning less than R95 750 per year will not have to pay tax.
If you are planning to buy a house, you will be happy with the fact that the transfer duty exemption amount has been increased from R1 million to R1.1 million. There is also some good news for people who are retiring soon: when you withdraw a lumpsum from your retirement savings, you will pay roughly 10% less tax on it than before. It is also a relief that the fuel levy remains unchanged.
The health-promotion levy, or “sugar tax”, remained the same but you will soon pay more for alcohol and cigarettes:
- 10 cents more on a 340ml can of beer
- 18 cents more on a 750ml bottle of wine
- R3.90 increase on a 750ml bottle of spirits
- R5.47 more for a cigar
- 98 cents more on a pack of 20 cigarettes
We will also be paying more for plastic shopping bags, with the levy increasing by 2 cents to 28 cents per bag.
What does the new budget mean for your budget?
In short, we have to get better at managing our own money:
- Avoid unnecessary travelling to keep transport costs down.
- Be creative with our household expenses. For instance, pool resources with friends or neighbours to buy food or household items in bulk to benefit from discounts.Drink
- and smoke less, and take your own shopping bags with to the shops.
- If at all possible, look into investing in solar panels for your home. Just be sure to do your homework properly.
Use this handy tax calculator to work out how the change in personal income tax brackets, the fuel price and taxes on tobacco and alcohol will impact your finances: Fin24 Income Tax Calculator (news24.com)
- Another, very important, thing we all have to do, is to hold public servants accountable for how they spend our taxes:If you know about fraud or corruption, blow the whistle.
- Insist on better service delivery from public servants.
- Get to know who your ward councillor is and insist that he or she works for your community.
