2022 MEDIUM TERM BUDGET POLICY STATEMENT(MTBPS)
“Democracy will have little
Filing Season 2022 for Individuals
Taxpayers, your turn to file your tax return starts on 1 July this year. The good news is that a significant number of individual taxpayers will be auto-assessed again this year, and this process will start in July. You will be sent an SMS if you are selected to be auto-assessed. When you receive the SMS, log into eFiling or MobiApp to view your assessment. If you agree with the assessment there is nothing more to do.
EXTENSION OF THE TEMPORARY REDUCTION IN THE GENERAL FUEL LEVY
On 31 March 2022, the Minister of Finance and the Minister of Mineral Resources and Energy jointly announced a temporary reduction in the general fuel levy of R1.50 per litre from Wednesday 6 April 2022 until 31 May 2022 to provide limited short-term relief to households from rising fuel prices following the Russia/Ukraine conflict. The relief was to be funded by a liquidation of a portion of the strategic crude oil reserves.
The Bounce Back Support Scheme comes into effect
The Bounce Back Support Scheme, a loan guarantee mechanism of R15 billion which was first highlighted in the February 2022 budget speech, has come into effect in April 2022. The scheme aims to facilitate job creation and economic growth in the wake of shocks such as the Covid-19 lockdowns, the July 2021 civil unrest in Kwa-Zulu Natal and Gauteng, and the ongoing flood disaster.
2022/2023 Budget Highlights
The Minister of finance Enoch Godongwana tabled his Budget review on the 23rd February 2022. The following were the key tax issues arising.
The upcoming South African elections
The upcoming South African elections hold the promise of change, introducing a range of potential impacts on local businesses. As business leaders, we must pay attention to several factors that could significantly affect the business environment:
Upcoming Budget Speech 2024: Tax Implications and Economic Outlook
Introduction
State of the Nation Address 2024
On February 8, 2024, President Cyril Ramaphosa delivered his eighth State of the Nation Address (SoNA) to a joint sitting of Parliament.
Solar Tax Breaks
Electricity Minister Kgosientsho Ramokgopa has stated that his department is advocating for the tax incentive for solar PV to be extended to batteries and inverters¹. The government wants more businesses and households to opt for rooftop solar, and efforts are under way to push for a tax incentive to be extended to inverters and batteries part of solar PV systems.
Reforms to deliver growth over the medium term
The Medium-Term Budget Policy Statement (MTBPS) presented by Minister Enoch Godongwana on 1 November 2023 outlined several key reforms aimed at delivering growth over the medium term:
Medium-Term Budget Policy Statement (MTBPS) Review
The Medium-Term Budget Policy Statement (MTBPS) for 2023 was unveiled by Finance Minister Enoch Godongwana on 1 November 2023. The MTBPS, also referred to as the "mini-budget", allows government departments to apply for adjustments to their budgets, apply for rollovers, and request additional funds for unforeseeable and unavoidable expenditures. It sets government policy goals and priorities, forecasts the macroeconomic trajectory, and projects the fiscal framework over the next three years by outlining spending and revenue estimates.
Draft National State Enterprises Bill
Finance Minister Pravin Gordhan has unveiled a sweeping plan to overhaul the governance and management of state-owned companies, which he said have been plagued by corruption, inefficiency and poor performance. The plan, which was announced in his medium-term budget policy statement on Wednesday, aims to restore the financial viability and strategic relevance of the entities, which collectively have more than R1 trillion in assets and employ over 300 000 people.
Companies First Amendment Bill, 2023 And Second Amendment Bill, 2023
The Companies First Amendment and Second Amendment Bill were tabled in Parliament on the 28 August 2023, and have been published. [The initial draft of the Companies Amendment Bill was published in 2018, followed by a revised draft Bill in 2021, both of which have undergone extensive public consultation and engagement].
What You Need to Know About Living Wills
A living will is not the same as a last will and testament. A living will is a document that lets you express your preferences for medical care in case you become unable to communicate them yourself. A living will can help you avoid unwanted or unnecessary interventions, such as life support, resuscitation, or tube feeding, that may prolong your suffering or go against your values. A living will can also help your family and doctors make difficult decisions on your behalf, and reduce the potential for conflicts or disputes. A living will should be prepared separately from your last will and testament. Your last will and testament only takes effect after your death, while your living will takes effect while you are still alive but incapacitated.
Progress reported in government and business partnership, with commitment to further accelerate key actions
The government and business leaders have announced the progress made in their partnership to address the most pressing challenges facing the country. The partnership, which was launched last year, aims to foster collaboration and innovation across sectors and regions, and to leverage the strengths and opportunities of both public and private actors. Some of the key achievements of the partnership include inter alia:
New Chief Director of Tax Policy at the Ministry of Finance
Ms Yanga Mputa has been appointed as the new Chief Director of Tax Policy at the Ministry of Finance. Ms Mputa has a wealth of experience in tax administration and policy, having served as a senior manager at the South African Revenue Service (SARS) and as a tax consultant at PwC. She holds a Master of Commerce degree in Taxation from the University of Cape Town and a Bachelor of Accounting Science degree from the University of South Africa.
Operation Vulindlela Progress Update
Since the establishment of Operation Vulindlela in October 2020, government implemented structural reforms to stabilise South Africa’s energy supply, establish a competitive logistics network, reduce the cost and improve the quality of digital communications and reform the visa regime to enable businesses to attract the skills they need to grow, and to make it easier for tourists to experience a world-class African destination.
Financial Stability –Extract from the Reserve Bank Review
In South Africa, idiosyncratic factors continued to weigh on domestic financial sector resilience and overall economic growth prospects. The most notable country-specific vulnerability is the increasingly detrimental and widespread ramifications of an insufficient and unreliable electricity supply, while concerns over the deteriorating South African rail and port infrastructure networks also continue to grow.
South African Reserve Bank issues upgraded banknotes and coin
The South African Reserve Bank (SARB) has introduced upgraded banknotes and coin into the South African market with effect from 4 May 2023. The denominations will be introduced incrementally. The upgraded banknotes and coin have enhanced security features and new designs; however, the broad themes for the upgraded banknotes remain the same as the current banknotes, while the theme for the coin is deep ecology.
Reserve Bank Monetary Policy
In March the Monetary Policy Committee decided to increase the repurchase rate by 50 basis points to 7.75% per year, with effect from the 31st of March 2023. Three members of the Committee preferred the announced increase. Two members preferred a 25 basis points increase.
Employment Equity Amendment Bill signed into law
President Cyril Ramaphosa has signed into law the Employment Equity Amendment Bill of 2020. The Amendment Bill seeks to advance transformation of South Africa’s workforce by setting equity targets for economic sectors and geographical regions, and requiring enterprises to develop transformation plans.
2023 SARB Economic outlook (MPC extract)
As this year commences, high inflation and weak economic growth continue to shape global conditions. Russia’s war in the Ukraine drags on and recession risks remain elevated in the Euro Area, even though energy constraints have eased. Growth prospects for the United States this year are lower. The growth outlook for China has improved but is likely to remain modest by historical standards. In the developing world, a number of economies face debt distress, exacerbated by tighter global financial conditions.
Budget date set for 22nd February
The Minister of Finance, Mr Enoch Godongwana, will deliver the National Budget Speech on 22 February 2023. As usual, the budget allocation always aims to strike a balance between competing national spending priorities and limited resources.
Operation Vulindlela
Operation Vulindlela is a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms and support economic recovery. Operation Vulindlela aims to modernise and transform network industries, including electricity, water, transport and digital communications. The diagram below is a roadmap to governments reform and growth.