Budget 2021: Here’s how much less income tax you’ll pay – and all the other big tax changes
A sharp increase in tax payments from mines (thanks to booming commodity prices), and a faster-than-expected recovery in VAT, have helped to spare South African taxpayers in the 2021 national Budget announced by finance minister Tito Mboweni on Wednesday.
As the pandemic wreaked havoc on the government’s finances, Treasury in October announced plans to hike taxes by R40 billion over the next three years.
These plans have now been scrapped after the state earned almost R100 billion more in tax than was expected. This was thanks to a “surge” in tax from miners, as well as a recovery in consumer spending and wages in recent months, Treasury said.
Monthly domestic VAT collections since August were higher than in pre-pandemic 2019.
Also, the demand for tax deferrals and other tax relief measures offered to companies during the pandemic was less than expected. In the end, tax payment relief of only R40 billion was granted – compared to a budgeted R70 billion.
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