South African citizens who drink and smoke will have to fork out more money from their pockets to satisfy their habits, but old-age pensioners will laugh all the way to the bank.
SOUTH African citizens who drink and smoke will have to fork out more money from their pockets to satisfy their habits, but old-age pensioners will laugh all the way to the bank.
Government debt will stabilise over the next three years as a result of a R150 billion injection from Reserve Bank Gold and Foreign Exchange Contingency Reserve Account that will be used to pay it off.
To combat load shedding, the government will promote further investments in renewable energy.
This was all revealed by Minister of Finance, Enoch Godongwana, during his 2024 Budget Speech at the Cape Town City Hall.
Godongwana had his audience cheering when he announced that the old age grant would be increased by R100, however, there were several jeers when he announced steep increases in the sin tax.
The minister gave an example of an elderly lady having scolded him for having increased the old age grant by a mere R20 last year.
“An increase of R100 to the old age, war veterans, disability and care dependency grants. This amount will be divided into R90 effective from April, and R10 effective October; 2024 … a R50 increase to the foster care grant and a R20 increase to the child support grant,” he announced.
When it came to sin tax, Godongwana did not mince his words saying the weak performance of the SA economy had resulted in a “sharp” deterioration in tax revenue collection for 2023/24, but he had put in measures to raise it.
“This budget contains tax measures that will raise R15 billion in 2024/25 to alleviate immediate fiscal pressure and support faster debt stabilisation. Revenue is mostly raised through personal income tax by not adjusting the tax brackets, rebates and medical tax credits for inflation.
“For alcohol products excise duties, above-inflation increases of between 6.7 and 7.2 per cent for 2024/25 are proposed,” he said.
Godongwana announced that a can of beer will increase by 14 cents; a can of cider and alcoholic fruit beverages 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.
“We also propose to increase tobacco excise duties by 4.7 per cent for cigarettes and cigarette tobacco, and by 8.2 per cent for pipe tobacco and cigars. This translates to a R9.51 cents increase for cigars, 97 cents increase to a pack of cigarettes and an extra 57 cents for a pipe of tobacco,” he said.
He, however, also announced relief in the fuel levy, putting R4 billion back into the pockets of the consumers.
“We are mindful of the already high cost of living and the impact fuel prices have on food and transport costs. In this regard, we are proposing no increases to the general fuel levy for 2024/25,” he said.
He conceded that load shedding was a problem that confronted all South Africans.
“It disrupts production, operations and livelihoods. Reforming the sector will result in long-term energy security. We made the necessary decisions in the past five years and these are bearing fruit. To promote further investments in renewable energy, this budget proposes an increase in the limit for renewable energy projects that can qualify for the carbon offsets regime, from 15 megawatts to 30 megawatts,” he said.
Godogwana said the government had also put money aside to service the upcoming national and provincial elections.
“To ensure the effective discharge of its duties during elections, and its other responsibilities beyond the polls, the Independent Electoral Commission is allocated an additional R2.3 billion.
“The police and defence are also allocated an additional R350 million to support elections. A further R200 million will be allocated for political party funding as political parties prepare for the general elections. The government also supports resettled farmers through land redistribution and tenure reform programmes, which have been allocated R6 billion,” he said.
* Read Finance Minister Enoch Godongwana’s full Budget Speech here
