Unpacking the 2017 National budget:

State of the Nation:

  • 95% of wealth in the country is in the hands of 10% of the population
  • 35% of the labour force are unemployed
  • An increase of 0.5% GDP growth is expected in 2017
  • South Africa’s growth is at a slow 1% a year in real capita terms
  • Projected revenues expected at R1.41tn
  • Proposed expenditure expected at R1.56tn (deficit of R149bn or 3.1% of GDP)
  • Government debt stands at R2.2tn (50.7% of GDP)

The Budget:

  • An additional R494m for tourism promotion
  • An additional R266m for aquaculture sector (Oceans Economy Phakisa Operation)
  • 8bn for Provincial Roads Maintenance Grant accounting for increase in traffic volumes
  • 4bn for SANRAL to strengthen and maintain national road network
  • 2bn for development/operation of public transport – Public Transport Network Grant
  • 7bn is allocated to the Passenger Rail Network Agency of South Africa
  • 9bn for SMMEs and cooperatives
  • 2bn for industrial infrastructure – special economic zones and infrastructure
  • R30bn on agriculture, rural development and land reform
  • An extension of Eskom’s R350bn guarantee, of which R218.2bn is expected to be used by 2016/17 year-end
  • 9bn allocation to broadband infrastructure
  • Spend on basic education will be over R240bn (17.5% of the consolidated budget)
  • 4bn over the medium term allocated to Regional Bulk Infrastructure Grant
  • 5bn to the Water Services Infrastructure Grant

VAT, taxes and levies:

  • Total tax revenue for 2016/17 will be R1.14tn , an increase of 7% on previous year
  • Middle income earners will be relieved to see no tax increase, whereas high income earners (above R1.5m per annum) will be taxed 45% of earnings
  • An increase of 6-10% in excise duties for alcohol and tobacco will take effect
  • An increase of 30c/l in the general fuel levy & 9c/l in the road accident fund levy
  • The sugar tax of 2.1c p/gr of 4gr/100mm will be implemented once legislative amendments have been promulgated
  • Carbon tax will be considered in Parliament later this year
  • Dividend withholding tax rate to be increased by 5% to 20%

More useful links: