Why Break The News Over Breakfast?
24 February 2017
By Zikona Stokwe and Zanele Kunene, Assistant Financial Planners, BDO Wealth Advisers
The South African National Budget was aired at lunchtime, debated during dinner time and summarised at breakfast. BDO South Africa’s Budget Breakfast, highlighted and summarised the key eye-openers of the 2017-2018 financial year. It is imperative as an individual to know what to expect from the Budget Speech, as we do our eggs, toast and coffee for a breakfast menu.
The Eggs also known as the National Debt.
In the past years the national deficit has gone beyond boiling point; heavily effecting every sector. Professor Matthew Lester, a speaker at the BDO breakfast, and Davis Committee member, discussed the impact of government spending on the health and education sector. Government spending and borrowing in the 2017/18 year increased by R10 billion
The Toast also known as consumption taxes.
The changes that effect our everyday life such as; sin tax increasing by 6%-10%, sugar tax to include intrinsic and added values, and fuel tax. All these crumbs add up, so as you put together your personal budget consider these changes.
The Coffee also known as individual tax.
Personal income tax collection to Treasury is like caffeine to your breakfast and your morning. It’s essential fuel to keep the engine going. Our budget is balanced with tax revenue collections. This year, the burden is falling largely on you and I, the individual tax payer. An additional tax collection in excess of R16 billion is expected from individual tax. Not only are the high income earners, who have taxable income above R1.5M being taxed at a marginal 45% tax rate, but so is every other taxpayer paying more income tax than last year thanks to bracket creep.
“...We are not fighting the enemy but chasing trends.” - Professor Matthew Lester
Another eye-opener in the budget speech was the increase in dividend withholding tax from 15% to 20% as a major concern which could possibly discourage investment.,
The national budget is complex as is its impact on our personal wealth and wellbeing. So before ordering your breakfast, speak to your Financial Adviser and ask what’s best on the menu. Taking advice from someone in the know can only make for a more pleasurable start to your day.
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