Despite speculation over his future,finance ministerMalusi Gigaba will deliver the budget speech in the National Assembly this afternoon.All eyes will be on whether Gigaba will increase taxes orVAT, and how free higher education will be funded.
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JOHANNESBURG - Finance Minister Malusi Gigaba Finance Minister announced increases in VAT and other taxes to generate an additional R36-billion this financial year.
Delivering his 2018 budget speech in Parliament on Wednesday, Gigaba said it was a tough but hopeful speech.
From 1 April the value-added tax (VAT) rate goes up to 15 percent from 14 percent and the fuel levy will rise by 52c a litre.
Gigaba said VAT had remained the same since 1993 and was low compared with "some of our peers, such as Argentina. We therefore decided that increasing VAT was unavoidable if we are to maintain the integrity of our public finances."
The current zero-rating of basic food items such as maize meal, brown bread, dried beans and rice would limit the impact of the VAT hike on the poorest households, he said.
Social grants are also to be increased from 1 April.
Personal income-tax rebates and brackets will be increased at a rate below inflation, with greater relief for those in the lower-income tax brackets.
The excise duty rate on luxury goods rises two percentage points to 9 percent, while a higher estate duty tax rate of 25 percent will be imposed on estates greater than R30-million.
So-called sin taxes, on alcohol and tobacco, will be increased by between 6 and 10 percentage points.
Budget2018 Rise in alcohol and tobacco increases:— Heidi Giokos (@Heidigiokos) February 21, 2018
- Spirits by R4.80 per 750ml bottle
-Sparkling Wine by 73c per 750ml bottle
-Cigarette Tobacco by R1.37 per 50g
-Cigars by R6.45 per 23g eNCA BudgetSpeech2018
Although this is Gigaba&39;s first full-term budget speech, some commentators believe it will also be his last.
Gigaba’s position is not certain amid talk of an imminent cabinet reshuffle.
On Tuesday, President Cyril Ramaphosa told Parliament changes to the cabinet will not be done in haste.
[HAPPENING NOW] The DA is briefing the media on the party&39;s preview of Finance Minister MalusiGigaba&39;s Budget2018 speech. Gigaba is expected to deliver his maiden Budget Speech in Parliament on Wednesday afternoon. Courtesy DStv403 pic.twitter.com/HIa0mutzVo— eNCA (@eNCA) February 20, 2018
"Changes of this nature must be well considered, they should not be made in haste. I know members want it to happen yesterday it will not happen yesterday...
"This review, which we expect to take a number of months, will be based on thorough analysis... the noisy ones on this side will also make your inputs...the views of stakeholders will be considered so South Africans understand the rationale for the decisions we are going to take in this regard," said President Cyril Ramaphosa.
For a link to Treasury&39;s budget tool, click here