An employment tax incentive to support young work seekers and personal income tax relief of R7 billion are among the highlights of the 2013 Budget, tabled by Finance Minister Pravin Gordhan on Wednesday.
Taking its cue from the National Development Plan (NDP), completed last year, the R1.15 trillion budget also proposes spending cuts of R10.4 billion, incentives for those employed in special economic zones, and tax relief for small businesses.
Gordhan said economic growth was projected at 2.7 percent in 2013, 3.5 percent in 2014, and 3.8 percent in 2015.
The budget provided for consolidated spending of R1,149,390 million, and revenue of R985,719 million, for an expected deficit of 5.2 percent, dropping to 3.1 percent in 2015/16.
The current account deficit was expected to average 6.2 percent over the next three years.
Highlights of the 2013 Budget tabled by Finance Minister Pravin Gordhan in the National Assembly on Wednesday include:
- Consolidated spending in 2013/14 of R1.15 trillion, and revenue of R985.7 billion, for an expected deficit of 5.2 percent, dropping to 3.1 percent in 2015/16;
- Tax revenue for this year (2012/13) expected to be R16.3 billion below the 2012 Budget estimate;
- Economic growth projected at 2.7 percent in 2013/14, 3.5 percent in 2014/15, and 3.8 percent in 2015/16;
- Consumer price inflation expected to remain within target band (three to six percent) over medium-term;
- Current account deficit to average 6.2 percent over next three years;
- Moderate employment growth expected over medium-term;
- Spending cuts of R10.4 billion over next three years in response to tight fiscal conditions;
- Contingency reserve reduced by R23.5 billion over medium-term;
- Real growth in spending to average 2.3 percent over medium-term;
- Debt stock as percentage of GDP to stabilise at about 40 percent in 2015/16;
- Personal income tax relief of R7 billion in 2013/14;
- Employment incentives to support young work seekers and special economic zones;
- Tax relief for small businesses;
- Tax treatment of contributions to pension, retirement annuity, and provident funds to be harmonised;
- Phased implementation of carbon tax proposed;
- Increase of 15c/l in general fuel levy and 8c/l in the Road Accident Fund (total 23c/l), effective from April 3;
- Tax on malt beer increases by 7.5c, to R1.08 per 340ml can;
- Tax on unfortified wine increases by 15c per 750ml bottle;
- Tax on ciders and alcoholic fruit beverages increases by 7.3c per 330ml bottle;
- Tax on spirits increases by R3.60, to R39.60 per 750ml bottle; and
- Tax on cigarettes increases by 60c, to R10.92 per packet of 20.
Additions to spending plans over next three years include:
- R5.2 billion for local government equitable share, to help smaller municipalities meet developmental commitments;
- R4.2 billion to provincial equitable share to phase in adjustments resulting from Census 2011;
- R3.2 billion to Passenger Rail Agency of SA for rail signalling infrastructure;
- R2.6 billion for regional bulk water infrastructure;
- R1.9 billion for the municipal water infrastructure grant;
- R1.5 billion for De Hoop dam;
- R1.4 billion to SA National Roads Agency Limited for road construction and maintenance;
- R1.1 billion for Square Kilometre Array and R0.6 billion for science and technology infrastructure;
- R1 billion to provinces to increase number of teachers, and R800 million for grade R teachers;
- R1 billion to human settlements grant; and
- R900 million to integrated national electrification programme.