As South Africa is battling Stage 6 load shedding, we heard on Wednesday that government will be taking over more than half of Eskom’s moerse R423-billion debt in a bid to address the power utility’s vrot finances and help with its upkeep and operational requirements.
Finance Minister Enoch Godongwana made this announcement during his Budget Speech while tabling the 2023 estimates in Parliament, making good on his promise for the state to shoulder at least two-thirds of the utility’s debt burden.
Godongwana said the R254bn debt relief the government was proposing had very strict conditions and would be about R168bn in capital, and R86bn in interest over the next three years.
This unprecedented large-scale programme is the first time that the government is making such a direct intervention at the troubled state-owned enterprise.
Although South Africa’s economy only grew by an estimated 2.5% in 2022 (up from the 1.9% projection in the Medium Term Budget Policy Statement), the minister managed to project a tax revenue estimate of R1.69 trillion, an increase of R93.7bn from the 2022 February Budget statement.
In other news, the National Treasury will spend more on social grants, from R233bn to R248.4bn, due to an increase of recipients and the value of grants.
The old age and disability grants increase by R90 on April 1, and a further R10 on October 1. The result is a total increase to R2 090, Godongwana said.
The child support grant rises from R480 to R510 on October 1 2023, while the foster care grant increases from R1 070 to R1 130 over the same period.
The Covid-19 social relief of distress grant will also be extended for a year until March 31 2024.
Now for some bad news – sin taxes will be going up. The government is proposing an increase in excise duties on dop and entjies of 4.9%.
This means that duty on:
∎ A 340ml can of beer increases by 10 cents.
∎ A 750ml bottle of wine goes up by 18c.
∎ A 750ml bottle of spirits is to increase by R3.90.
∎ A 23g cigar is going up by R5.47.
∎ And on a pack of 20 cigarettes, the duty rises by 98c.
But, taxpayers can breathe a sigh of relief. Income tax rates have not been increased and Godongwana said taxpayers will pay less income tax.
“The personal income tax brackets will be fully adjusted for inflation, which will increase the tax-free threshold from R91 250 to R95 750.
“Medical tax credits will be increased by inflation, to R364 per month for the first two members, and to R246 per month for additional members.”
dailyvoice@inl.co.za