#Budget2022: Taxpayers get some respite

Hi John

Finance Minister Enoch Godongwana’s first national budget does not contain any significant surprises, although an R181 billion tax windfall significantly improved the government’s fiscal position. The windfall stems from the unexpected tax revenues flowing from high commodity prices.

Many people will be sceptical about whether the government will be able to implement the budget efficiently. Still, in the context of the current economic climate, it sends positive signals to the world that the government has arrested the fiscal slide we’ve seen over the past few years.

Most South Africans will also benefit as only sin taxes were raised, and the National Treasury did not increase any other taxes such as personal income tax or Vat. The fuel and RAF levies also remain unchanged ¾ the first time in many years!

As was announced last year, the corporate tax rate will drop from 28% to 27% next year.

The R181 billion windfall also improved the most essential fiscal indicators. The budget deficit will be around 5.7% of GDP, much better than last year’s expectation of 6.8%.

The total debt-to-GDP ratio is expected to be around 70%, lower than last year’s expectation that it may rise to about 80%.

All in all, not a bad budget.

Enjoy Moneyweb’s budget coverage.

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