When it comes to the intricacies of the national budget many of us go a little cross-eyed, which is why we’re glad to have the help of the professionals.
If it’s moving money in and out of the country we always turn to Currencies Direct, but they also have a handle on what goes down here at home.
They put their team to work analysing yesterday’s effort by Pravin, and below is what they had to say about the 2017 budget speech:
As expected Minister Gordhan came out to deliver an entertaining budget speech (as budget speeches go) in a Parliamentary setting that has been volatile, to say the least – a mirror image of the rand some argue.
It began, as usual, with a patriotic-ANC tone in the form of Oliver Tambo’s vision for South Africa. Has this budget edged closer to achieving this ideal? We will leave that up to you.
Key points to note in general:
• GDP gradual movements from 0,5% to 1,3%: improved global conditions and increases business confidence.
• Narrowing budget deficit from 3,4% of GDP to 2,6%.
• R28 billion extra revenue to be raised from taxes in 2017/18.
• Current account deficit is set to decrease to 3,7% by 2018.
• Consumer Price Inflation (CPI) decline from 6,4% in 2016 to 5,7% by 2018.
• Continue and enable investment through reform and partnerships with independent power producers.
You like graphs and tables? You’re in luck:
Finally, a look at the highly anticipated tax reforms:
• Total tax revenue projection sits at R1,14 trillion – a 7% increase.
• New top marginal income tax bracket – earners above R1,5 million taxed at 45%.
• Higher dividend withholding tax (20%); higher fuel taxes and sin taxes raise a total of R11,9 billion.
• Sugary beverage taxes to be implemented once legislature is approved.
A quick aside: you know everyone is going to be talking about that sin tax, so here are those details from Fin24:
Taxes on alcohol and tobacco are set to rise as follows:
Fortified wine 26c/750ml;
Ciders and alcoholic fruit beverages 12c/340ml;
Unfortified wine 23c/750ml;
Sparkling wine 70c/750ml;
Cigarettes 106c/packet of 20;
Cigarette tobacco 119c/50g;
Pipe tobacco 40c/25g; and
An increase of R4,43 per bottle of hard liquor – steep, but you have to raise that extra cash somehow.
Take away message
Minister Gordhan used the word “transformation” more than 50 times in his Budget Speech, while noting the following: “Our growth challenge is intertwined with our transformation imperative. We need to transform in order to grow, we need to grow in order to transform. Without transformation, growth will reinforce inequality; without growth, transformation will be distorted by patronage.”
You got all that? Of course you do.
Our thanks to Currencies Direct for the summary, and a reminder that if you’re transferring money overseas (or bringing it home), you’re going to want to chat to the best in the business.
They’ll change money from one currency to another, all done in strict accordance with South Africa’s Exchange Control regulations and they’ll even set up your bank account for you too.
That all works a little like this:
Budget speech business over for now. Everyone breathe a sigh of relief.
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