By South Africa’s economy is going through a tempest affecting production, which in turn erodes on corporate profits. The mining sector is faced with serious challenges with looming retrenchments on the cards.
The mining sector has been the backbone of South Africa’s economy for over 150 years, but the sector, alongside with other sectors are plummeting shedding hundreds, and even thousands of workers and losing profits. The country is losing out on tax revenue as more and more companies are not making profit.
The Minister for Finance Enoch Godongwana; says though the country collected R1. 73 trillion in tax revenue, there is a shortfall of R56.1 billion. He says the shortfall is largely due to the decline in corporate profits and revenue from taxes on mining.
Load-shedding itself has hurt the economy of South Africa immensely; with the country losing R1 billion a day. The country had to relay mostly on personal tax income which boosted revenue.
“Over the medium term, revenue projections are R45.6 billion higher than the 2023 MTBPS estimates which increased personal income tax and additional medium term revenue proposals. This budget contains tax measures that will raise R15 billion in 2024/25 to alleviate immediate fiscal pressure and support faster debt stabilization,” said Minister Enoch Godongwana.
Godongwana said he will not be adjusting tax brackets, rebates and medical tax credit for inflation as revenue is mostly raised by personal tax income.
The Minister has however raised the sin tax saying for alcohol products excise duties, above-inflation increases of between 6.7 and 7.2 per cent for 2024/25 are proposed.
This means: A can of beer increases by 14 cents; • A can of a cider and alcoholic fruit beverage goes up by 14 cents; • A bottle of wine will cost an extra 28 cents; • A bottle of fortified wine will cost an extra 47 cents; • A bottle of sparkling wine will cost an extra 89 cents; and • A bottle of spirits, including whisky, gin or vodka, increases by R5.53.
Increase on tobacco excise duties by 4.7 per cent for cigarettes and cigarette tobacco, and by 8.2 per cent for pipe tobacco and cigars.
This translates to: A R9.51 cents increase for cigars; • A 97 cents increase to a pack of cigarettes; and • An extra 57 cents for a pipe of tobacco.
“You will be happy to hear then, that we are tabling an increase of the excise duty on electronic nicotine and non-nicotine delivery systems, known as vapes, to R3.04 per millilitre. On environmental taxes, the carbon tax increased from R159 to R190 per tonne of carbon dioxide equivalent as of 1 January 2024.
The carbon fuel levy will increase to 11 cents per litre for petrol and 14 cents per litre for diesel effective from 3 April 2024,” announced Minister Enoch Godongwana.
