2013 Budget Crib Sheet

ABH

My “crib sheet” for Budget 2013 – helps me follow Pravin better

Have invested a lot of time preparing for today’s National Budget. Grant Thornton has asked me to share perspectives with its clients in Jhb tonight (at the JSE) and Durban tomorrow (Moses Mabhida Stadium). Here’s my “crib sheet”

compiled after having a close look at the 2012 Budget; the 2012 Mini Budget; and the State of the Nation Speech.

As always, though, am expecting Pravin to spring some surprises. In the 32 Budgets I’ve been exposed to back from the days of Owen Horwood (rememeber him?), there’s always been something we didn’t expect during the Finance Minister’s couple hours in the national spotlight.   

AH’s Crib Sheet for Budget 2013:

BUDGET 2012 was based on expected GDP growth of 2.7%; actual was 2.5% so shortfall in revenue of at least R5bn expected, restricting scope for further relief.

REMINDER: BUDGET 2012 TAX CHANGES:

• Fiscal drag relief of R9,5bn
• Change in tax for medical aid contributions
• Dividend tax introduced at 15%
• CGT increased from 25% to 33% for individuals
• Property Loan stock treated same as property unit trusts
• Electricity levy of 1c/kwh for renewables like solar water
• General fuel levy +20c/litre
• Road accident fund +8c/litre to 88c
• Tobacco tax up 5-8%
• New benchmark tax on alcohol introduced over 2 yrs: spirits +20% in 2012 to R36/bottle; beet +10% to R1.01 for 340ml

DEAD CERTS FOR BUDGET 2013:

• Introduction of national tax on Gambling (1%) from April 2013
• Second year of new benchmark, big increases tax on spirits and beer
• NHI introduced (phased in over 14 years; R6bn pa needed from 2014)

ON THE AGENDA FOR CONSIDERATION IN BUDGET 2013:

• Acceleration of R3trn infrastructure programme
• More detail on changes in Land Reform approach to “just and equitable”
• Measured to addressing Youth Unemployment Crisis
• Reform of tax treatment of retirement funds introduced 2014
• Promoting of household savings and more on reforming retirement sector: Possible tax exemptions on savings products: individuals allowed up to R30 000 tax free pa, to maximum of R500 000
• SEZs to be created
• Revised policy on Carbon Tax
• Financial transaction tax extended to financial derivatives
• More on addressing Gauteng Freeway Improvement Program (cost R20bn; Treasury gave R5,8bn in 2011/12)
• Treasury to appoint National Procurement Officer
• Treasury to develop National Price Reference System
• Treasury, Dept of Public Works promised joint review on property leases
• Financial sector reforms to continue: focusing on access to financial services; adjustment to capital adequacy rations for banks (insurers next)
• “Twin Peaks” regulations for banking scheduled for publication
• More on simplifying cross border investments
• More info on establishment of Municipal Infrastructure Support Agency
• Expansion of Cities Support programme (currently in EL, PE, Pta, Dbn)
• Watch for confirmation of promised switch in spending from public sector salaries to infrastructure, economic competitiveness and health

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