Budget blues: From fuel hikes to more sin taxes
Those who smoke and drink — but even those obliged to drive — will feel the pinch of the 2019 budget's so-called sin taxesthe tertiary title
Here are four budget blues that will affect many.
From tough talk on saving Eskom and Sars, to increases on tax on alcohol and cigarettes – we take a look at which aspects of finance minister Tito Mboweni’s 2019 budget will hit close to home.
Finance minister Tito Mboweni delivered his 2019/2020 budget speech in Parliament on Wednesday‚ and the message is clear: South Africans need to tighten their belts.—
Public-sector wage bill
Mboweni announced that the public-sector wage bill will be cut by R37bn in the next three years through early retirement and natural attrition. No additional funds will be allocated towards salaries.
He said the wage bill is unsustainable and reducing it will give public servants the opportunity to retire early. Business Day reported that early retirement of public servants could cost the government about R16bn over the next two years.
The government is also expected to remove performance bonus payments to cut costs.
The tax revenue shortfall for the 2018/2019 fiscal year is estimated to be R42.8bn‚ which is R15.4bn more than estimated in the medium-term budget policy statement (MTBPS) in October.
According to Mboweni‚ about half of the increase in the revenue shortfall since October was due to “higher-than-expected” VAT refunds.
Business Day reported that corporate income tax is estimated to yield R21bn less than the R773bn projected in the 2018/2019 budget; personal income tax R8.4bn less than the R505.8bn projection; VAT R22bn less than the R348bn forecast; and the fuel levy R2bn below the R77.5bn estimate.
Mboweni announced an increase in excise duty on alcohol and some tobacco products.
Excise duty on a can of beer will go up by 12c to R1.74; on a 750ml bottle of sparkling wine it will go up by 84c to R10.16; on a 750ml bottle of wine it will increase by 22c to R3,15; and on a bottle of whisky it will go up by R4.54 to R65.84.
The duty on a pack of 20 cigarettes will increase by R1.14 to R16.66.
Motorists will suffer further blows‚ with increases in fuel levies. Mboweni announced that petrol tax will go up by 29c/l ‚ and diesel increasing by 30c/l in April.