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Govt set to gain R17bn from income taxes & fuel levies

People earning more than R181,900 a year will now pay an extra one percent in personal income tax.

Finance Minister Nhlanhla Nene delivers his 2015 Budget Speech in Parliament on 25 February. Picture: GCIS.

CAPE TOWN - Finance Minister Nhlanhla Nene will gather in around R17 billion from the income tax and fuel levy increases he announced in his budget.

The minister warned, when delivering his budget policy statement in October, that raising taxes was on the horizon and on Wednesday he stood by his word.

People earning more than R181,900 a year will now pay an extra one percent in personal income tax.

WATCH: Economist explains the budget

Nene also increased the general fuel levy by 30.5 cents and the road accident fund levy by 50 cents, putting an extra 80 cents on to the price of a litre of fuel.

He tried to defend the increase in income tax when he briefed journalists ahead of his budget.

"This is one area where we thought we would be able to do without inflicting too much pain and taking away too much from the economy."

In his speech, the minister warned of possible growth and higher interest rates ahead, noting the strangle hold of the energy crisis.

"It's not just an inconvenience when the lights go out; there is a cost to the economy, production and income and jobs forgone."

Nene says plans to raise R23 billion for Eskom by selling off state assets are far advanced.