What the new budget means for you

Budget

Every year in February, the last Wednesday of the month is reserved for the National Budget Speech when the South African Parliament gathers to hear the proposed budget for the coming year. This year Minister Pravin Gordhan addressed the nation with a budget speech that he describes as a budget that will promote “sharing”.

But what does this new budget mean for the average Joe – i.e. you and I?

If you really want to, you could sift through the almost two-hour long speech to try figure it out. Or you could take a short-cut and read through the three important points below that I’ve picked out and “shared” with you about how the new budget could affect you…

1. Sin tax

This ultimately affects smokers and those who enjoy alcoholic drinks. Unfortunately the new budget means you are going to be paying the following additional amounts every month for your favourite vices…

– 9c more per 340ml beer or cider
– 27c more per 750ml bottle of wine
– 68c more per pack of cigarettes
– R4,80 more per bottle of whiskey

So the only way you’re going to ‘save’ money on these products is if you cut back or kick the habit.

The fuel levy is unfortunately also increasing by 20c extra per litre

This coupled with E-tolls if you are living in Gauteng, and the constant increase in fuel prices all around the country means that travelling is going to become increasingly expensive.

To keep your wallet looking healthy, this may mean looking at alternatives like carpooling if possible, or following Cape Town’s example, and encouraging citizens to hop on a bicycle when commuting to work. You could also look into local public transport options.

Holidaying is also an area where you can be savvy and save on additional travel costs by exploring options that are closer to home. For example, if you are in Gauteng, why not look at heading to the Pilansberg or Mpumalanga for your break instead of travelling to the coast?

2. Retirement fund relief

If you’ve reached that milestone age for retirement, this year’s budget brings with it some good news for you. For those who have a retirement fund and are able to withdraw it while it is still under R500 000, the new budget dictates that you won’t be charged any tax on the amount. This concession really brings new meaning to enjoying your ‘golden years’.

3. Income tax relief

For those who aren’t quite earning the big bucks just yet, regardless of age, the budget is providing some welcome relief for you too. Practically this means that if you earn R250 000 or less you will now be paying R1 273 less tax on your income.

But be smart about what you intend to do with your new found cash. Instead of splashing out on luxury items or additional monthly expenses, view it as bonus money to go towards savings, bonds or your child’s education.

Finally, the tax threshold has also increased so only those of you earning over R70 700 per annum will have to pay taxes this year.

All in all, this year’s budget brings with it some welcome assistance to those in lower income brackets while encouraging those who earn more to carefully consider how their funds are best spent.

I’d love to hear your views on the subject, so feel free to comment and voice your opinion.

The full article can be found at www.all4women.co.za 

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