Mboweni puts money back in taxpayers’ pockets

Taxpayers will get relief to the tune of around R2 billion because tax brackets will be adjusted to just above inflation.

Finance Minister Tito Mboweni in Parliament for his Budget Speech on 26 February 2020. Picture: GCIS.

CAPE TOWN - Finance Minister Tito Mboweni says there’ll be more cuts in state spending as he battles to balance the government’s books – but he’s announced there will be no increase in personal income tax this year.

Instead, taxpayers will get relief to the tune of around R2 billion because tax brackets will be adjusted to just above inflation.

Tabling his R1.95 trillion Budget in Parliament this afternoon, Mboweni warned that growth will be lower than expected thanks to a limping economy and load-shedding.

But he has focused on further cuts in government spending – including the public sector wage bill - rather than overburdening taxpayers and possibly harming economic recovery.

Mboweni’s putting some money back in taxpayers’ pockets.

“This Budget means that a teacher who earns on average R460,000 a year, will see their taxes reduced by nearly R3,400 a year. Hard-working taxpayers, who earn on average R265,000 a year, will see their income tax reduced by over R1,500 a year.”

Mboweni said the government wanted to broaden the corporate tax base with a view to reducing it from its current 28% “in the near future” to help businesses grow.

Property costing up to R1 million will no longer be subject to transfer duty.

The annual limit for tax-free savings accounts goes up from R33,000 to R36,000.

Mboweni said taxes on small businesses would be reviewed to be made more effective and to reduce scope for fraud and abuse.

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