Cape Town - Here is a snapshot of the 2008 National Budget.
Highlights
- 2008 Budget returns more than R10bn to taxpayers.
- Corporate tax reduced from 29% to 28%.
- Simplified tax packages for small businesses with a turnover of less than R1m.
- Compulsory registration for VAT to kick in at R1m.
- Introduction of an electricity levy to support energy efficiency.
- Tax incentives to encourage venture capital equity investment in small, medium and micro-sized enterprises (SMMEs).
- R5bn in tax subsidies over the next three years to support the emerging industrial policy.
- Learnership allowances revamped to encourage apprenticeships.
Economy and fiscal stance
- GDP growth of 5% in 2007 with growth averaging about 4.35 a year over the forecast period.
- CPIX inflation rising to 7.1% in 2008 before declining to 4.9% in 2009.
- Gross fixed capital formation projected to rise from 21% of GDp in 2007 to 24% in 2010.
- Estimated consolidated national budget surpluses of 1% in 2007/8 and 0,8% in 2008/9 with projected surpluses over the three-year period.
- R60bn to support Eskom's capital financing requirements over the next five years.
Tax proposals
Total tax relief for individuals of R7.7bn. Reduction in corporate income tax rate from 29% to 28%. Simplified tax regime for small businesses. R5bn in tax subsidies over the next three years for labour-intensive industries and industrial policy. An electricity levy of 2c per kilowatt hour. Fuel taxes to increase from April 2 by 11c. A packet of 20 cigarettes will cost 66c more. A 759m ml bottle of wine will cost 12c more. A 340ml beer will cost 5c more. A 750ml bottle of spirits will cost R2.17 more.
Spending on public services
- R33.2bn for provinces mainly for school education, health care, welfare services and roads.
- R6.5bn to municipalities for the extension of free basic services
- R12.5bn for social grants (including child support for up to their 15th birthday in 2009).
- R9bn conditional grants for school building, HIV and Aids, hospital revitalisation and school nutrition.
- R8.2bn for public transport, roads and railway infrastructure
- R6bn for housing, water and general built infrastructure.
- R2.5bn for industrial development and SMMEs.
- R2.6bn more for agriculture and land reform.
- R2bn for 2010 FIFA World Cup stadiums and related infrastructure.
- R2bn more for correctional facilities.
- R1.4bn for higher education, research and knowledge development.
- Fin24
