Minister of Finance Malusi Gigaba making a 2018 budget speech in Parliament. Picture: Phando Jikelo/African News Agency/ANA

Cape Town - National Treasury has announced the increase in social grants up to 193 billion this financial year, in what Finance Minister Malusi Gigaba called a bid to cover for the tax increases he proposed in his budget speech.

Gigaba said value added tax (VAT) would increase from 14% to 15% while personal income tax would be increased at below inflation while social grants would be adjusted above inflation.

“Government has taken deliberate steps to adjust social grant values above inflation to at least partially cover for the proposed increase in VAT.

“The Old Age, disability and care dependency grants will increase on 1 April 2018 from the existing R1600 by R90 to R1690 and by a further R10 to R1700 on 1st October 2018.

“The Child Support grant will increase from the baseline of R380 to R400 on 1 April and to R410 on 1 October. This is a 6.6% annual increase,” Gigaba said.

Since the Medium Term Budget Policy Statement, an additional R2.6 billion has been added to social grants to enable the increases.

In aggregate, Gibaba said the government would be spending R792 billion on basic education, R668 billion on health and R528 billion on social grants, over the medium term.

Political Bureau