2023 Budget Speech Highlights
The budget speech covered various areas such as the present economic condition of the country, growth predictions, challenges related to the energy sector, ongoing efforts to address the indebted power utility Eskom, fresh tax proposals, and the social wage. The major focus of this year’s budget speech was the energy crisis, and more information was given on how to alleviate Eskom’s debt, along with two new tax measures to encourage investment in renewable energy and independent electricity generation.
As Payroll and HR professionals, our primary concern revolves around the implications that the current situation may have on our workforce and our own personal circumstances.
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:
- Medical Aid Tax Credits has increased to R 364 for each of the first two dependents and R 246 for each additional dependant thereafter.
- Meals and incidental costs, an amount of R522 is deemed to have been expended per day; or
- Incidental costs only, an amount of R161 is deemed to have been expended per day.
Reimbursive Travel Rate
- Increased from R 4.24 to R 4.64 per kilometer.
Tax rates from 1 March 2023 to 29 February 2024 Individuals and special trusts:
Above scales have been increased by expected inflation rate of 4.9%.
Tax rebates and tax thresholds:
Other topical changes:
- COIDA Earnings Threshold has increased from R 529 624 to R 563 520 per annum.
- BCEA Earnings Threshold has increased from R 224 080.48 to R 241 110.59 per annum.
- Tax Free Retirement Income Funding Withdrawal increased to R 550 000.
- National Minimum Wage increased to R 25.42 per hour.
- Granting tax relief by adjusting personal income tax brackets and rebates for the effect of inflation.
- An expanded tax incentive for businesses of 125% of the cost of renewable energy assets used for electricity generation, brought into use during a period of two years from 1 March 2023.
- A tax rebate to individuals for solar PV panels of 25% of the cost for a limited period, subject to certain conditions, and capped at R15 000 per individual.
- Adjustments to tax tables for transfer duty, retirement fund lump sum benefits and retirement fund lump sum withdrawal benefits, for the effect of inflation.
- Increases of 4.9% in excise duties on alcohol and tobacco.
- No changes to the general fuel levy and road accident fund levy.
- The increase of the health promotion levy on beverages to 2.3 cents per gram of sugar is delayed until 1 April 2025.
All LabourNet Clients making use of our Payroll and HRIS software will be upgraded on the 2nd of March 2023. 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 contact us by following the link below: