So, the funds speech occurred and it was a doozy. Bear in mind once we began speaking about it back here? We thought the most important issues to occur could be new taxes, larger taxes, greater grocery payments, a decrease rate of interest, and static (if not worse) unemployment figures. After which the speech occurred and amongst different issues, our authorities made a shocking announcement. Plainly they’ve determined to lower the general public wage invoice as an alternative of selecting to squeeze South African taxpayers much more in an effort to scale back the funds deficit. In consequence, the general public wage invoice will probably be reduce by simply over R160 billion over the subsequent 3 years. Additionally, they promised to slash their pointless expenditure wastage, like cellphone utilization and journey preparations.
Which is all the time good to listen to… However what does this imply for you, and also you, and also you, and that different chap behind you?
We’ve damaged down what we expect will have an effect on most, if not all, South Africans.
Beginning with… Private revenue tax
Above-inflation will increase have been introduced for revenue tax brackets and tax rebates, which sounds nice should you’re into economics. For individuals who aren’t studying the Monetary Occasions over their morning cuppa, which means people pays much less revenue tax. By the use of instance (and in order that we will all get pleasure from this announcement somewhat extra) which means should you earn say, R22,000 per thirty days, you would save roughly R1,500 in tax per yr.
Add in our reducing automotive insurance coverage premiums or a number of automotive low cost (or each) and also you’re in your technique to some main financial savings by the tip of the yr!
Now let’s speak investments
It was additionally introduced that the annual contribution restrict to ‘tax-free financial savings accounts’ could be elevated to R36,000. This is a rise of R3,000 from 2019 and means which you can put away extra of your hard-earned casheroo sooner and profit from compound curiosity. The lifetime contribution restrict stays at R500,000.
Should you’re questioning what ‘compound’ means, we’ve obtained a nifty clarification of how compound financial savings works once you take our automotive insurance coverage (the 1 with the month-to-month reducing premiums) which ought to make it easier to out.
The take care of switch duties
Considering of promoting your property? You’re in for some excellent news, as a result of there’s been a rise within the threshold for paying switch duties on the sale of property. Even higher, properties costing lower than R1 million (up from R900,000) will now be exempt from switch duties!
That can assist you promote your home faster, we’ve nailed down some ridiculously helpful tips over here.
Are there any individuals on the shedding finish?
Sadly, there are some individuals who’ll undoubtedly really feel a bit unloved this yr, and this contains motorists and those that eat alcohol and smoke cigarettes. We will inform you that you simply’ll pay R2.89 per bottle of spirits, 14c extra for the standard bottle of wine, and 8c extra for a can of beer. Additionally, people who smoke can look ahead to paying 74c per pack of cigarettes, with plans within the works to tax e-cigarettes in 2021.
Now, let’s speak to the motorists, as a result of that’s plenty of us, sure? Sure. The primary sting is the elevated gas levy. The gas levy has been elevated for the previous couple of years on the bounce and based on the AA, ‘Such a rise this yr will probably be greater than detrimental, it may very well be catastrophic’.
So there’s that punch to the budgets of plenty of South Africans. After which there’s additionally potential VAT hikes, which may additionally make motoring dearer. Supposedly we’ll see VAT rise by one other 1%, which takes us to 16% and will have a damaging impact on the best way gas is priced in South Africa. This sort of makes it vital for us all to look at our budgets, rethink how a lot we’re spending on objects affected by these will increase, and make a number of switches to avoid wasting.
And what higher place to avoid wasting, as a motorist, than in your automotive insurance coverage?