2021 Budget Speech Recap
The 2021 Budget Speech was one of the most anticipated in recent times, following a year of increased public spending and a universal ‘tightening of the belt’ due to the COVID-19 pandemic.
Treasury expects to collect R1.21 trillion in taxes, which is roughly R213 billion less than expected, making it the largest tax deficit on record.
A lot has been said about Finance Minister Tito Mboweni’s plans for the 2021 - 2022 fiscal year, and we’ve broken down the highlights to get you up to speed with anything you may have missed.
We can breathe a collective sigh of relief as there has been no increase on personal income tax or corporate income taxes. Income tax brackets have also increased by 5%, decreasing the burden on lower to middle income earners.
Surprisingly, corporate tax has been reduced by 1% point, from 28% to 27%. A small but highly welcomed changed aimed to alleviate the financial burden created by 2020.
Unsurprisingly, government has levied an 8% increase in duties on tobacco and alcohol in an effort to recoup revenue lost during their respective bans, and to deter usage in order to promote good health habits during the COVID 19 crisis.
Fuel will see an increase of 27 cents per litre.
R19,3 billion has been allocated for a nationwide vaccination programme.
The project will be funded by budget allocations and emergency withdrawals. This means that no new taxes will be introduced to fund the programme. Added to this is the good news that most South Africans are expected to receive free vaccinations making it accessible to those who need it most.