2019 National Budget in a nutshell

By Alec Hogg

• Eskom will receive an annual grant of R23bn from taxpayers over the next three years.
• This will be funded by higher income tax revenue and projected savings generated by the early retirement of an expected 30 000 public servants.
• There will be no adjustment to personal income tax brackets, raising R12.8bn through fiscal drag.
• The tax free income tax threshold will be increased from annual R78 150 to R79 000.
• Tax on petrol will be increased by 29c a litre and diesel by 30c a litre. This will raise an additional R1.3bn for the fiscus.
• Excise duties on alcoholic beverages and tobacco products, so called sin taxes, will raise R1bn.
• The carbon tax will be implemented on 1 June 2019.
• White bread flour, cake flour and sanitary pads join the VAT zero rated list from 1 April 2019.
• Eligible income bands for the employment tax incentive will be increased from 1 March 2019.
• The Budget deficit is projected to grow to R243bn (4.5% of GDP) from the revised 2018/19 estimate of R210bn (4.2%). It is projected to fall to 4% of GDP by 2022.
• Projected economic growth in 2019 has been adjusted downwards from 1.7% to 1.5%. This is expected to rise slightly in future years.
• Eskom’s dire financial position and R50bn in foreign debt repayments has resulted in an increase of almost R100bn to R335bn in the 2019/20 gross borrowing requirement, rising from a revised 4.7% to 6.2% of GDP.