How The 2024 Budget Speech Affects Your Pocket

By Raine St.Claire

There won't be any relief for personal income-taxpayers In the upcoming 2024/25 tax year. The Personal Income Tax (PIT) table and tax rebates remain unchanged, ignoring inflation. This lack of adjustment means that salary increases will be a push up into a higher tax bracket with increased tax rates.

Medical tax credits will also remain unchanged, with no mention of phasing them out or introducing new taxes for National Health Insurance (NHI).

Some Relief

The good news is that the three fuel levies: the general fuel levy (GFL), the Road Accident Fund (RAF) levy, and the customs and excise levy, won't go up. “In this regard, we are proposing no increases to the general fuel levy for 2024/25. This will result in tax relief of around R4-billion. This is money back in the pockets of consumers.” –Finance Minister Enoch Godongwana

The two largest levies on fuel — the GFL and the RAF levy — will therefore remain at R6.13 on every litre of petrol and diesel sold in the country. However, the carbon tax on petrol and diesel will increase. The carbon fuel levy will rise from 10 to 11 cents per litre for petrol and between 11 and 14 cents per litre for diesel, starting April 3, 2024, as mandated by the Carbon Tax Act.

Motorists To Dig Deeper

The Department of Mineral Resources and Energy (DMRE) has announced that South African motorists will have to dig deeper into their pockets with a hike in the petrol and diesel price of both 93 and 95 octane petrol increased by R1.21 per litre from Wednesday, 6 March 2024.

The price of diesel (0.05% sulphur) increases by R1.06 per litre, while diesel with 0.005% sulphur increases by R1.19 per litre.

Inland

• 93 Petrol R24.13

• 95 Petrol R24.45

• Diesel 0.05% (wholesale)R22.42

• Diesel 0.005% (wholesale)R22.62

• Illuminating Paraffin R16.48

• LP GAS (per kg) R38.31

At The Coast

• 93 Petrol R23.41

• 95 Petrol R23.73

• Diesel 0.05% (wholesale) R21.70

• Diesel 0.005% (wholesale) R21.93

• Illuminating Paraffin R15.55

• LP GAS (per kg) R35.35

Tax Status

No adjustments were announced in the rates of Personal Income Tax (PIT) or value-added tax (VAT).Looking ahead, revenue projections over the medium term are R45.6-billion higher than the 2023 MTBPS estimates, incorporating adjustments to personal income tax and additional proposals. The primary source of revenue is personal income tax, achieved by maintaining tax brackets, rebates, and medical tax credits in line with inflation.

For alcohol products, the proposed excise duties entail above-inflation increases of 6.7% to 7.2% in 2024/25. Overall increases in tobacco excise duties is 4.7% for cigarettes and cigarette tobacco, and 8.2% for pipe tobacco and cigars.

Drinkers, Smokers and Vapes Will Pay More

• A can of beer increases by 14 cents

• A can of a cider and alcoholic fruit beverage goes up by 14 cents

• A bottle of wine will cost an extra 28 cents

• A bottle of fortified wine will cost an extra 47 cents

• A bottle of sparkling wine will cost an extra 89 cents

• A bottle of spirits, including whisky, gin or vodka, increases by R5.53

• R9.51 cents increase for cigars

• 97 cents increase to a pack of cigarettes

• An extra 57 cents for a pipe of tobacco

• An increase on electronic nicotine and non-nicotine delivery systems, (vapes) to R3.04 per millilitre

Motor Vehicle Emissions Tax

Proposed increase for passenger vehicles from R132 to R146 per gram of CO2 emissions per kilometre, and for double cabs from R176 to R195 per gram of CO2 emissions per kilometre starting April 1, 2024.

Plastic Bags And Incandescent Globe Taxes

Starting April 1, 2024, the aim to reduce single use plastic bags, will see an increase from 28 to 32 cents per bag. To encourage energy efficiency, incandescent light bulbs will increase from R15 to R20 per light bulb.

Solar Tax Breaks

Government has not extended the tax incentives for individuals to generate renewable energy. The incentive for individuals, providing a 25% rebate on solar panel costs, with a maximum of R15,000, to reduce their tax for the 2023/24 tax year, ended on February 29, 2024.

The rebate for businesses, allowing them to reduce their taxable income by 125% of the cost of an investment in renewables with no thresholds on the size of the projects, will, however, continue for another year, with the deadline scheduled for February 28, 2025.