Budget speech in a nutshell

Staff Reporter

A one percentage point rise in VAT, no real personal tax relief, higher sin taxes and a large fuel levy were among the measures announced by Finance Minister Malusi Gigaba in Parliament on Wednesday.

Gigaba delivered his first national Budget speech before the National Assembly this afternoon, calling Treasury’s opus “a tough, but hopeful budget”.

“Budget 2018 charts a path out of economic stagnation,” he said.

The Budget raises taxes in the hopes of collecting an extra R36 billion in revenue. It also slashes government spending by R85 million, cutting down the scope of several large infrastructure projects, including some relating to basic education and healthcare.

The Budget seeks to reignite stubbornly stagnant economic growth, and projects a slow but steady increase in GDP over the next three years. Gigaba announced a one percentage point hike in the VAT rate, to 15%. That means, with the exception of 19 zero-rated items, everything we buy will become that bit more expensive.

Increasing the VAT rate has been mooted for some years, but has been fiercely resisted by unions, and pro-poor activists.

However, government figures suggest that 80% of the effect of the hike in the VAT rate will be shouldered by higher income earners.

The hike in the rate will raise enough money to partially pay for fee-free tertiary education for lower-income students.

This is the first increase in the VAT rate since the tax was introduced in 1994. Gigaba told a pre-budget briefing that this will not be the first of many such hikes, saying instead that shortfalls will be made up through a variety of interventions, including the sale of some assets held in government’s property portfolio.

There is little by way of personal income tax relief in the Budget. The top four tax brackets remain unchanged, meaning higher income earners will be paying more of their salaries to government in real terms.

Treasury has also cut back on medical aid related tax breaks, with below inflation increases in medical tax credits. That means in real terms people with private medical aids will pay more for them.

The money government will save on those tax credits will go towards funding the National Health Insurance project, which will get underway this year.

Lala NgoXolo Bra Hugh

JOHANNESBURG - Legendary jazz musician Hugh Masekela has passed away following a battle with prostate cancer.

In a statement released the morning of 23 January 2018, the Masekela family stated that the music icon had passed away in Johannesburg surrounded by his loved ones after fighting a courageous battle with prostate cancer.

They've described him as a loving father, grandfather, brother and friend.The 78-year-old trumpeter had been receiving treatment since 2008, when doctors discovered a small “speck” on his bladder. While the treatment appeared to be successful, he had to undergo surgery in March 2016 as the cancer had spread.

Last year, Masekela announced that another tumour had been discovered after he fell while on tour in Morocco in April. The musician then had emergencey treatment in September to neutralise the tumour and subsequently cancelled all of his music commitments to continue the fight against prostate cancer.

"Bra Hugh" as he was affectionately known throughout the world was renowned for his many hits like Bring back Nelson Mandela.In a career spanning more than five decades, Masekela gained international recognition with his distinctive afro-jazz sound and hits such as Soweto blues, which served as one of the sound-tracks to the anti-apartheid movement, and of course the unmistakable Stimela.

President Jacob Zuma has sent his condolences to the Masekela family, describing "Bra Hugh" as one of the pioneers of not just jazz music, but music in its whole in this country.

A son mourns his father

The passing of poet laureate Keorapetse Kgositsile was a loss very close to home for rapper Earl Sweatshirt. The 23 year old rapper reacted to his father’s death with these simple words, “thank y’all for your thoughts and love,” The message coupled with a few pictures of his Father, was tweeted by the rapper in reaction to his father’s passing.
Keorapetse William Kgositsile, also known by his pen name Bra Willie, was a South African poet and political activist. An influential member of the African National Congress in the 1960s and 1970s, he was inaugurated as South Africa's National Poet Laureate in 2006.[1] Kgositsile lived in exile in the United States from 1962 until 1975, the peak of his literary career.

He made an extensive study of African-American literature and culture, becoming particularly interested in jazz. During the 1970s he was a central figure among African-American poets, encouraging interest in Africa as well as the practice of poetry as a performance art; he was well known for his readings in New York City jazz clubs. Kgositsile was one of the first to bridge the gap between African poetry and Black poetry in the United States.

In 1975, Kgositsile decided to return to Africa, despite his blossoming career in the United States, and took up a teaching position at the University of Dar es Salaam, in Tanzania. In 1978, he married another ANC exile, Baleka Mbete, who was also living in Tanzania. Still from exile, he renewed his activities with the ANC, founding its Department of Education in 1977 and its Department of Arts and Culture in 1983; he became Deputy Secretary in 1987.

Kgositsile taught at several schools in different parts of Africa, including Kenya, Botswana, and Zambia. Throughout this period he was banned in South Africa, but in 1990 the Congress of South African Writers (COSAW), with which he was already associated, decided to attempt a publication within the country. The successful result was When the Clouds Clear, a collection of poems from other volumes, which was Kgositsile's first book to be available in his native country.

SARS to collect sugar tax from April 2018

The South African Revenue Service will collect the Sugary Beverages Levy (SBL) from 1 April 2018.

The levy is fixed at 2.1 cents per gram of the sugar content that exceeds four grams per 100ml, which means the first four grams per 100ml are levy free.

SARS on Friday said the levy falls under the Rates and Monetary Amounts and Revenue Laws Amendment Bill 2017, as passed in Parliament on 5 December 2017.

“Part 7A of Schedule No.1 to the Customs and Excise Act, 1964, provides for a health promotion levy on sugary beverages which have been manufactured in or imported into South Africa. Imported products will be taxed when they are cleared for home consumption and locally manufactured products will be taxed at source,” said the revenue service.

SBL returns and payments can be submitted electronically through SARS eFiling and will also be accepted at Customs and Excise branches.

Meanwhile, the licensing and registration of manufacturers of sugary beverages will take place from February 2018.

Only commercial manufacturers that produce sugary beverages with a total annual sugar content in excess of 500kg per year need to be licensed and pay the SBL. Non-commercial producers below this threshold will be expected to register but will not be subject to the SBL.

“The levy is part of government’s programme to prevent and control non-communicable diseases (NCDs) and assist in the prevention and control of obesity,” said SARS.

The revenue service will engage industry stakeholders during roadshows to guide them through the process. Dates for the roadshows will be published on the SARS website in January 2018.

Information about the SBL is available on www.sars.gov.za.

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