CAPE TOWN – Finance Minister Tito Mboweni delivered the Budget Speech 2019 to Parliament on February 20.
According to auditing firm PwC, his address was forthright but there were many bitter pills to swallow in the detail, the minister provided some good news (for rating agencies) on key subjects such as Eskom and the public sector wage bill.
Barry Knoetze, Associate Director PwC Tax said: "Given the economic realities facing the Minister of Finance this year, it is unsurprising that he had a difficult task balancing the need to improve tax revenue with the implications of placing additional tax burdens on the individual taxpayer. As a result, the Minister today announced that there would be no increases to individual tax rates for 2019/2020, although there would be the usual increases in sin taxes and fuel taxes."
Knoetze said that in contrast to what we have become accustomed to, there will also be no adjustment to the individual tax tables to take the effects of inflation into account.
"In other words, there will be no adjustment to take into account the effects of bracket creep. The net result of this is that Treasury expects to collect an additional R12.8 billion. There will, however, be a very small increase in the primary, secondary and tertiary rebates of 1.1 percent which will offer very limited relief (R153, R234 and R261 per year, respectively)," said Knoetze.