Category: Budget 2019/20

Against a backdrop of tough economic times, Finance Minister Tito Mboweni walked a tightrope between appeasing taxpayers and managing the fiscus. Below, tax experts unpack key aspects of his maiden Budget address. Personal income tax The announcement that there would be no increases in income tax rates and that VAT would remain unchanged was welcomed, as government sought to limit the negative effects of tax hikes on an already struggling economy.

Author: Jan Cronje, Fin24. Tito Mboweni, South African Minister of Finance walks with members of the Finance Ministry up Government Avenue to deliver his medium-term budget speech on October 24, 2018. (RODGER BOSCH/AFP/Getty Images) ~ AFP Moody’s, the only major ratings agency that has not already downgraded SA’s sovereign debt to junk, on Wednesday responded to Finance Minister Tito Mboweni’s maiden Budget by saying it “highlights the governments limited fiscal flexibility amid a challenging economic environment”.

We must demonstrate were the government, were not petitioners. We must govern…” Finance Minister Tito Mboweni at a press conference before his budget speech, 20 February 2019.Tito Mboweni was in a take-no-prisoners and spare-me-the-ideology mood at the traditional press conference ahead of his budget speech in the National Assembly on Tuesday. Nursing a cold, the minister of finance told the acting commissioner of the revenue service to break some bones when dealing with illicit tobacco traders.

Author: Carin Smith. Budget 2019 delivered a mixed bag for the housing market, say property experts. While transfer duty and capital gains tax have remained unchanged, the introduction of a pilot subsidy programme for first-time buyers is encouraging, says Herschel Jawitz, CEO of Jawitz Properties. “While consumers will continue to face financial pressures as a result of the lack of tax relief, there should be no impact on an already subdued residential market,” said Jawitz. Dr Andrew Golding, chief executive of the Pam Golding Property group, echoed this view, saying funding for the upgrading of informal settlements, as well as the pilot project with R950m over three years to help first-time home buyers, made for welcome news. However, he noted, land expropriation was yet to be finalised and clarified. Urban development He also pointed out that Finance Minister Tito Mboweni had said there was a need to respond to rapid Read More …

Tito Mbowenis first full Budget was a curious affair. On the one hand, it should be seen as a pre-election event designed to pacify most constituencies with a view to shoring up support in the coming May election. But it didnt stop there, and fairly boldly explored a new narrative on economic policy seemingly being tested by both President Ramaphosa and Minister Mboweni himself. Firstly, this was ultimately a budget of bad news without any real corrective action possible. It was always going to be a report-card on recent history and the cumulative effects of gross mismanagement, malfeasance and policy stagnation. The figures presented by Mboweni bore this out. Another downwards revision of GDP to 1.5% this year indicates just how tough it is. But when you factor in a substantial drop in tax revenue, a whopping R1.2bn borrowed each working day to cover debt repayments, and the worst budget Read More …

Finance Minister Tito Mboweni on Wednesday referenced the private sector as the key engine for job creation in his national Budget speech. Fin24 spoke to the experts, who highlighted several key positives and negatives for small and medium enterprises from this year’s Budget.

Putting money into offshore structures, thinking that you are safe from the tax man, is no longer the case, warns Jonty Leon, financial emigration legal manager at Tax Consulting SA. In terms of tax disclosure, it’s crucial to note that Finance Minister Tito Mboweni mentioned the globally agreed Common Reporting Standard in his Budget Speech on Wednesday showing a “clear nod” towards cracking down on tax dodgers, Leon says.

South Africa is supposed to be a secular state, but one can perhaps forgive Tito Mboweni, the Minister of Finance, for quoting numerous biblical verses in his 2019 Budget Speech. After all, South Africas fiscal situation is enough to make many people hope for divine intervention. The 2019 budget numbers show that the past year has been no exception to some new normals that have been established in South Africa. These include slow economic growth, state-owned enterprises requiring unplanned financial support, failing plans aimed at stabilising national debt levels, and tax revenues significantly lower than forecast.

There will be no increases in income tax rates and the VAT rate will remain unchanged, as government seeks to limit the negative effect of tax hikes on SA’s already struggling economic growth. In total, the Finance Minister Tito Mboweni’s maiden Budget includes proposals to raise R15bn in additional tax revenue for the 2019/2020 financial year. This will boost total estimated tax revenues to R1.4trn in 2019/2020. Tax revenue estimates for the 2018/19 year, however, have again been revised downwards. Treasury is now expecting a revenue shortfall of R42.8bn, an increase of R15.4bn over the R27.4bn estimated in the mini Budget in October. The shortfall was mainly due to a combination of economic weakness, problems of poor tax administration by the SA Revenue Service, and higher-than-expected VAT refunds, said Treasury in its Budget review. R15bn in additional revenue Not raising personal income tax brackets means more individuals may fall into Read More …

Finance minister Tito Mboweni’s first National Budget came with no real surprises or shocks. Given the pressure-cooker that is state finances, especially those of struggling power utility Eskom, it appears to be a well-balanced act. Government’s central economic policy goal remains to accelerate inclusive growth and create jobs, said the minister, while ensuring sustainable finances by containing the Budget deficit and stabilising public debt.