The Minister of Finance, Enoch Godongwana, delivered the 2022 Budget Speech on the 23 of February 2022.
The Minister of Finance did not create an uproar with his maiden budget speech and said some calming words like, “Tax revenue collected was more than budgeted” and “The South African government finances are turning the tide”.
Although for us Payroll and HR professionals, top of mind would be what the implications are on my workforce and me as an individual.
To help you answer these questions, follow the below link to make use of our updated and easy to use PAYE calculator.
High level summary:
Tax-free threshold increases from R 87 300 to R 91 250
Medical Tax Credits has increased to R 347 for each of the first two dependents and R 234 for each additional dependant thereafter
TAX RATES FROM 1 MARCH 2022 TO 28 FEBRUARY 2023 INDIVIDUALS AND SPECIAL TRUSTS
Above scales have been increased by 4%
TAX REBATES AND TAX THRESHOLDS
Government expects to achieve a primary surplus – where revenue exceeds non-interest expenditure – by 2023/24. In 2024/25, main budget non-interest expenditure will grow slightly above CPI inflation.
The consolidated budget deficit is projected to narrow from 6 per cent of GDP in 2022/23 to 4.2 per cent of GDP in 2024/25.
Gross loan debt will stabilise at 75.1 per cent of GDP in 2024/25.
Debt-service costs consume an increasing share of GDP and revenue. They are expected to average R333.4 billion a year.
Tax revenue strengthened significantly in recent months and is expected to reach R1.55 trillion for 2021/22, well above projections.
Given the revenue improvement, government proposes R5.2 billion in tax relief to help support the economic recovery.
Reduction in company income tax rate to 27 % for tax years ending on or after 31 March 2023
Plastic bag levy is increased by 3 cents to 28 cents per bag from 1 April 2022
No changes to the general fuel levy and road accident fund levy
Increases of between 4.5 and 6.5 per cent in excise duties on alcohol and tobacco
Health promotion levy on beverages is increased by 0.1 cent to 2.31 cents per gram of sugar from 1 April 2022. Increasing the monthly benefits for employers under the employment tax incentive by 50 per cent
Granting tax relief by adjusting personal income tax brackets and rebates for the effect of inflation
All LabourNet Clients making use of our Payroll and HRIS software will be upgraded on the 3rd of March 2022. Should you have processed a payroll already for the new tax year the system will recalculate and allow the correction in the next pay period.
Should you have any concerns, please contact your dedicated consultant or join us for our tax seminar by registering HERE
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