The Treasury has quantified its balancing act as it attempts to strike a balance between the demands of the national budget, the rising cost of social security, and the capacity for energy production. In his second statement on the nation’s budget, Finance Minister Enoch Godongwana stated that the National Treasury has a budgetary plan to balance “everything” that South Africa requires.
Godongwana believes this will secure social wages and help maintain a favorable balance sheet without unsustainable borrowing and harmful tax increases. According to the National Treasury, the country’s gross domestic product growth is projected to be less than 1% in 2023 as a result of protracted and crippling power outages, deteriorating global economic circumstances, and growing inflation.
Without an uninterrupted supply of power, there can be no reversal in growth. Eskom is also the recipient of a sizeable portion of this year’s budget. A significant debt reduction plan for Eskom has also received approval from the Treasury. It will result in the transfer of R254 million in debt from the utility to the government’s balance sheet. There will be stringent restrictions on this.
In order to encourage homes to install solar panels and lessen their reliance on the national grid, Godongwana unveiled a tax refund program. The National Treasury anticipates a rise in tax income of more than R90 billion, despite year- end predictions for tepid economic growth.
In spite of the budget’s lack of new tax proposals, smokers and drinkers would nevertheless pay more due to regular hikes in so-called sin taxes. Government proposed an increase in the excise duties on alcohol and tobacco of 4.9 %, in line with expected inflation. This means that the duty on:
• A 340 ml can of beer increases by 10 cents
• A 750 ml bottle of wine goes up by 18 cents
• A 750 ml bottle of spirits will increase by R3.90
• A 23 gram cigar will increase by R5.47
• A pack of 20 cigarettes will increase by 98 cents
To this end, SARS has completed 2 316 seizures of cigarettes & tobacco products to the value of R598.8 million. An additional R18 billion worth of schedules and assessments have been raised, targeting syndicated tobacco-related crimes. Furthermore, SARS has collected more than R1.2 billion in revenue and handed over 92 cases for criminal proceedings with the NPA of which 2 resulted in successful convictions relating to tobacco smuggling syndicates. With more than R370 billion set aside for social development in 2023, the social wage will
continue to be the government’s largest spending base.
View the Budget 2023 highlights here: