Budget 2020 Speech: Properties worth 1 million or less will no longer adhere to transfer duties
Mr President, in your State of the Nation Address two weeks ago you reminded us that our capacity to win is not diminished. We have it within ourselves to be the best in the world. Congratulations to Miss Universe Zozibini Tunzi, the Springboks, and the Proteas, who won while we were preparing this Budget.
Our economy has won before, and it will win again.
Before democracy our growth was pedestrian. Indeed, between 1990 and 1992, the economy contracted for three years in a row.
In the fifteen years following democracy, economic growth averaged 3.6 per cent a year. The gross debt-to-GDP ratio declined from 46 per cent to 26 per cent.
To support the property market, the threshold for transfer duties is adjusted. Property costing R1 million or less will no longer be subject to transfer duty.
There will be a renewed focus on illicit and criminal activity, including non‑compliance by some religious public benefit organisations. Religious bodies must operate within the strict boundaries of the law if they are to enjoy tax exempt status. The annual tax free savings account contribution limit rises to R36 000.
We have increased excise duties to keep pace with inflation. From today:
A 340ml can of beer or cider will cost only an extra 8c
A 750ml bottle of wine will cost an extra 14c
A 750ml bottle of sparkling wine an extra 61c
A bottle of 750 ml spirits, including whisky, gin or vodka, will rise by R2.89
A packet of 20 cigarettes will be an extra 74c
A 25 gram of piped tobacco will cost 40c more
A 23 gram cigar will cost an extra R6.73
I am again happy to report that there is no increase in the price of sorghum beer.
In line with Department of Health policy, we will start taxing heated tobacco products, for example hubbly bubbly. The rate will be set at 75 per cent of the rate of cigarettes. Electronic cigarettes, or so-called vapes, will be taxed from 2021.
To adjust for inflation, the fuel levy goes up by 25 cents per litre, of which 16 cents is for the general fuel levy and 9 cents is for the Road Accident Fund levy.
Despite this increase, the liabilities of the RAF are forecast to exceed R600 billion by 2022/23. We need to take urgent steps to reduce this risk to the fiscus and bring about a more equitable way of sharing these costs. One option is to introduce compulsory third-party insurance.
The carbon tax and other measures will help green the economy, and will bring in R1.75 billion over the next few months. This will be complemented by more focussed spending on climate change mitigation. We remain extremely concerned about plastic bags throughout the length and breadth of our country. In this regard, we have increased the plastic bag levy to 25 cents.
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