Finance Minister Malusi Gigaba delivers his Budget speech in Parliament on Wednesday. Pictiure: Phando Jikelo/ANA Photo
Parliament - Taxes charged on expensive cellphones, vehicles and other luxury goods like make-up are set to set consumers back a bit more in the coming months and years as government raises taxes on luxury goods.

In the 2018 Budget Review, tabled in Parliament by Finance Minister Malusi Gigaba on Wednesday, government said it would apply higher ad valorem excise duties on certain goods, meaning the pricier the item, the more tax charged.

"Government proposes to increase these rates, which are already applied to some goods that are consumed mainly by wealthier households (such as cosmetics, electronics and golf balls)," the review said.

"The associated revenue-raising potential is not significant, but it is aligned with the progressive structure of the tax system."

The ad valorem excise duty for passenger cars and light commercial vehicle would be increased from 25 to 30 percent. In essence, the more South Africans pay for a car the more tax they will pay.

Smart phones will now also be included in the classification of cellphones and therefore also be subject to ad valorem excise duties.

"Government will also consult on a proposal to replace the flat rate for cellphones with a progressive rate structure based on the value of the phone."

African News Agency/ANA