In his 2022 budget speech, Finance Minister Enoch Godongwana revealed a more positive picture for government’s finances. The South African Revenue Service took in R182 billion more than expected in the past year.
These stronger revenues allowed the Minister to announce a number of tax relief measures. “Now is not the time to increase taxes and put the recovery at risk,” he said.
He also emphasises that: “Corruption is a major blight on our country. It has lowered our economic growth potential, made us fiscally more vulnerable, and severely weakened the state’s capability”. National Treasury will be looking to recover money from those involved in corrupt activities highlighted by the Zondo Commission
A Brief Summary
| Personal Income Tax Relief |
| Tax brackets and rebates have increased by 4.5%, in line with inflation. The highest marginal tax bracket of 45% is now from R1,731,601. The primary rebate will be R16,425, up from R15,714. |
| Tax Free Threshold |
| The annual income level at which under-65s will start paying tax was raised from R87,300 to R91,250. |
| Medical Tax Credits |
| Increased from R332 to R347 for the first two members and from R224 to R234 for subsequent members |
| Corporate Income Tax |
| Falls to 27% for any tax year beginning on or after 1 April 2022. |
| Employment Tax Incentive |
| To help address youth unemployment, the employment tax incentive will increase from a maximum of R1,000 per month to R1,500 per month in the first 12 months, and from R500 to R750 in the second 12 months. |
| Transfer Duties |
| Transfer duty rates were unchanged. |
| Capital Gains Tax |
| No changes were announced to CGT. |
| Retail Savings Bonds |
| A new ‘top-up’ bond will be offered from April 2022, allowing individuals to invest an initial amount from R500 and top up in increments of R100. |
| Business Bounce Back Scheme |
| To support small businesses affected by Covid-19, R20 billion will be made available as guarantees for small business loans and equity-backed loans. |
| Tax Free Savings Accounts |
| The annual cap on contributions to tax-free savings accounts remains at R36 000 from 1 March 2021, with the lifetime limit also remaining at R500 000 |
| Sin Taxes |
| Overall, increases were between 4.5% and 6.5%, below the increases last year that were above 8%. |
