What is the National Budget?
South Africa’s national budget outlines the government’s revenue and expenditure for the upcoming fiscal year, as well as the incentives that will be offered to individuals and businesses, and the tax rates that individuals and businesses will be required to pay.
Why should you care about the National Budget?
Taxation: any changes to tax rates, deductions, and credits will be in the budget. As a small business owner, you need to be aware of any changes to ensure you are compliant and taking advantage of any tax breaks available to you.
Government spending: The national budget outlines spending priorities, including any investments or subsidies that may be available to small businesses.
Economic outlook: It’s important to understand the state of the economy, including growth projections and inflation rates. This information can help you make more informed decisions about hiring, investing, and pricing your products or services.
Infrastructure spending: Understanding where government will be spending money is a useful strategic planning tool, particularly if your business is able to deliver goods or services to upcoming growth projects.
What’s not changing?
There will be no corporate, VAT or personal income tax changes (other than adjusting for inflation-induced fiscal creep), no fuel levy or Road Accident Fund changes and only inflation adjustments (around 5%) to social grants, tax rebates, medical tax credits, excise duties (“sin taxes”) and levies.
Is there good news?
The flexibility that National Treasury had with the budget this year was the result of better-than-expected tax revenue collections. While the market was expecting revenue collections to slow in the final months of the fiscal year, the Finance Minister announced an estimated R1.69 trillion revenue for 2022/23, R10.3bn more than was estimated in the MTBPS in October and R93.7bn more than was estimated in the National Budget last year.
That additional revenue also allowed for a 10% increase in retirement fund withdrawal levels and the brackets of the transfer duty table.
The changes in interest rates, social grants, public transport fares, and opportunities like the Eskom Debt Relief Programme and rooftop solar panel rebate can all have an impact on your business. By staying informed and proactive, you can position your business for success in the current economic climate.
Loadshedding, tax incentives, and social grants
High interest rates, rising fuel prices, and other challenges