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    2008 Budget Speech

    “Madam Speaker

    The global economy grew by an average of 5 per cent from 2003 to 2007. It was a period of robust expansion but also of widening international imbalances. Now there are storm clouds ahead.”

    This is how Trevor Manuel started this year’s annual budget speech. With a clear indication that we have a strong head wind to contend with.

    Trevor Manuel has now delivered a budget speech for the last 14 years, and is the world’s longest serving Finance Minister. Over this time he has offered fewer and fewer surprises on budget day, mainly as a result of getting the country’s fiscus in order, this year was no exception.

    Most of the relief this year comes in the form of adjusting tax levels to counter the effects of inflation. For example exemption from capital gains tax increases from R 15 000 per annum to R 16 000.

    There has been bracket creep for personal income tax. As always the adjustments favour the lower income earners. By way of example an individual (under 65 years of age) earning R 100 000 pa will now pay 5.26% less tax than last year, while someone earning R 1 000 000 will only save 1.17%.

    As has become the norm sin taxes are up again. Consumers are now going to have to pay an extra 66 cents for a packet of 20 cigarettes, an extra 12 cents for a bottle of wine, 5 cents extra for a 340ml can of beer, and R2.17 extra for a 750ml bottle of hard liquor. These amounts won’t break the bank, but do add up in the government’s coffers. The fuel levy is up 6 cents a litre, on top of all the increases that we’ve been experiencing.

    A new electricity levy has been tabled. It will cost the consumer 2 cents per kilowatt hour. This money will help Eskom increase its capacity (and also comes on top of the massive increase in electricity rates).

    Child support will be extended to children up to their 15th birthday from 2009.

    Exchange controls have been relaxed somewhat with the restriction on companies, trusts, partnerships and banks investing into rand futures, inwardly listed companies (for example Uranium One, Aquarius Platinum and the offshore tracker funds) being abolished. And while the R 2 000 000 offshore allowance for individuals hasn’t been changed, Treasury will introduce a R500 000 per year "discretionary allowance for purposes of travel, gifts, donations and maintenance".

    I have outlined some of the budget changes for individuals. Hopefully there is something in it for you! Ian will cover more of the budget in tomorrow’s report.

    Kind regards,

    Mike Browne

    Permalink2008-02-20, 17:27:19, by Mike Email , 1 comment
    Trackback address for this post: http://blog.sharenet.co.za/htsrv/trackback.php/657

    Comments, Trackbacks:

    Comment from: ian [Member] Email
    looks good
    PermalinkPermalink 2008-02-25 @ 16:39

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