A Wealthsmith\u2122 knows the importance of running a successful budget \u2013 one that considers all incomes and expenses \u2013 whether it\u2019s for a household, a business or the South African economy. We tuned in for the 2018 Budget Speech to bring you all the highlights and to help you prepare for the year ahead.<\/p>\n
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VAT increase<\/strong><\/p>\n <\/p>\n For the first time since 1993, South Africa\u2019s value-added tax (VAT) has been raised \u2013 by one percentage point to 15% from 1 April 2018. This change will play a pivotal role in generating an additional R36 billion for the national purse. Government trusts that 80% of the effect of the hike in the VAT rate will be carried by higher income earners. You can expect to see a further rise in the prices of consumer goods.<\/p>\n <\/p>\n Income tax<\/strong><\/p>\n <\/p>\n There was no relief for tax payers, with the top four tax brackets remaining unchanged. If you want to see the impact of tax on your income, use a tax calculator to work out your annual and monthly income tax deductions according to your age and monthly salary.<\/p>\n <\/p>\n Medical tax credits<\/strong><\/p>\n <\/p>\n The budget also cut back on medical aid related tax breaks, with below inflation increases in medical tax credits. Therefore, if you have a private medical aid, you will be paying more for it in 2018. Money saved here will be put towards funding the National Health Insurance project which hopes to kick off this year.<\/p>\n <\/p>\n Estate duty<\/strong><\/p>\n <\/p>\n Another new tax proposal is the higher estate duty tax rate of 25% for estates greater than R30 million \u2013 a hefty amount if you\u2019re part of the super-rich.<\/p>\n <\/p>\n Fuel tax<\/strong><\/p>\n <\/p>\n Motorists will now get fewer kilometres for the same cost, as fuel levies are rising by 52 cents per litre. This is made up of a 22 cents per litre for the general fuel levy and a 30 cents per litre increase in the Road Accident Fund Levy from 4 April 2018. Now more than ever, it will pay to invest in a more fuel-efficient vehicle or to see where you can cut down on or share commuting costs.<\/p>\n <\/p>\n Sin tax and luxury goods<\/strong><\/p>\n <\/p>\n Guilty pleasures, the so-called sin tax, have been singled out once again for a price hike to raise revenue of R2.6 billion.<\/p>\n <\/p>\n For smokers, the following increases have been put in place:<\/p>\n <\/p>\n For alcohol, the budget announced these charges:<\/p>\n <\/p>\n <\/p>\n Tax on luxury goods<\/strong><\/p>\n <\/p>\n The ad valorem excise duties for luxury goods such as motor vehicles will be increased from 7% to 9%.<\/p>\n <\/p>\n Sugar tax<\/strong><\/p>\n <\/p>\n Here\u2019s another reason to try cut down on sugar: treasury has just added an extra sin to the list, with the announcement of sugar tax \u2013 to be imposed from 1 April 2018. Called the \u201cHealth Promotion Levy\u201d, it will tax sugary drinks in an effort to encourage healthier choices among South Africans. South Africans will be paying more for sugary drinks from April 1 this year, specifically a tax of 2.1c per gram of sugar per 100ml, above 4 grams per 100ml.<\/p>\n <\/p>\n Carbon tax<\/strong><\/p>\n <\/p>\n The state has increased the plastic bag levy by 50% to 12c per bag to reduce littering, with effect 1 April 2018.<\/p>\n <\/p>\n Funding fee-free education<\/strong><\/p>\n <\/p>\n Higher education has been a big talking point in recent months and duly got attention at the 2018 budget speech. It was decided that new first-year students with family incomes of below R350 000 per year at universities and TVET colleges will be funded for the full cost of their study in the 2018 academic year. The first phase of the government\u2019s fee-free higher education plan amounts to R57 billion over the next three years, of which R12.4 billion will go towards needy first-year students in 2018\/19. Specifically, more than 340 000 students at universities and over 420 000 full-time equivalent students at TVET colleges will be funded through this new bursary scheme in 2018.<\/p>\n <\/p>\n Feeling the budget squeeze?<\/strong><\/p>\n <\/p>\n You may be tempted to go into more debt or cut down on savings to continue your standard of living, however, you should never skimp on investing in your future.<\/p>\n <\/p>\n If you have any questions about how the budget impacts your finances and your investments, speak to your Indwe BlueStar adviser on 011\u00a0831 8000.<\/p>\n <\/p>\n Indwe BlueStar is an authorised Financial Services Provider. FSP 2759<\/p>\n","protected":false},"excerpt":{"rendered":" A Wealthsmith\u2122 knows the importance of running a successful budget \u2013 one that considers all incomes and expenses \u2013 whether it\u2019s for a household, a business or the South African economy. We tuned in for the 2018 Budget Speech to bring you all the highlights and to help you prepare for the year ahead. […]<\/p>\n","protected":false},"author":1,"featured_media":590,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-586","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"yoast_head":"\n\n
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