In case you have missed the important mid-term budget speech yesterday, here is a short recap of some important points to take note of:
No major increase of taxes
Mboweni said that government remains committed to sustainable public finances, and despite major spending pressures, the expenditure ceiling remains intact. This along with an 1.9% growth rate of non-interest spending, will see no major change in tax. The following items have also been marked for being zero-rated, these are bread and cake flour, as well as sanitary pads.
State-owned company bail-outs
The government would allocate additional funding to the amount of 1.2 billion for SA Express and 2.9 billion for the South African Post Office respectively. SARS will also receive an amount of 1.4 billion over the next three years to assist with operational efficiencies. An amount of 5 billion would be allocated for SAA as a bail-out, to assist in debt repayment.
Credit: IOL
No funds to increase state employee salary
The state employs around 1.3 million workers, who has seen above inflation salary increases of 11.2%. The public sector wage bill currently accounts for 35% of government expenditure, which is quite a bit more than what the minister finds is ideal (around 30%). State departments are tasked to find solutions to pay for the increases within the existing budgets.