With Finance Minister Tito Mboweni’s 2020 Budget Speech, the sustainability of the future of South Africa’s economy took the front seat, by focusing on the changes both consumers and businesses can expect.
Overall:
• The Finance Minister alluded to the reduction in corporate income tax rates in the near future.
• Over the next 12 months, a new capital flow management system will be put in place.
• The concept of emigration as recognised by the Reserve Bank will be phased out and will be replaced by a verification process.
• South African Airways: Over the medium term, the Government has allocated R16.4 billion to settle guaranteed debt and interest.
• Over the next three years, Government will transfer R112 billion to Eskom to enable the utility to meet its short-term financial obligations.
For consumers:
• The Government will increase the cap on the exemption of foreign remuneration earned by South African tax residents to R1.25 million per year starting from 1 March 2020.
• The threshold for property transfer duties has been raised to R1 million.
• Despite expectations of an increase, there were no increases in VAT.
• The fuel levy goes up by 25 cents per litre.