Driving to become more expensive
Carpooling or making use of public transport may need to become more used methods, as the costs of owning a car are set to increase. This is because the general fuel levy is set to increase by 30 cents per litre on 6 April 2016. In addition to this, the minister proposed a new tyre levy of R2.30 per kilogram that will be used to finance recycling programmes. An increase in the motor emissions tax rate from R90 to R100 for every gram of emissions released per kilometre above a certain rate for passenger vehicles is expected, with double cabs increasing from R125 to R140.
Students’ sins to become a burden
Because of the new proposals to increase revenue by increasing indirect taxes, a fiscally-irresponsible night out could set you back even more in the near future. This is because of the proposed increases of between 6% and 8.5% in the duties charged on alcoholic beverages and tobacco products. Perdeby took the liberty of calculating this increase in very broad terms. A student who buys one bottle of spirits a week will pay an extra R3.94 per week and an extra R204.88 for the 2016-2017 financial year. For the wine-lovers, two bottles of wine a week could cost you an additional R25 for the year ahead, while beer-lovers who consume a six-pack a week will pay an additional R34.32 in the upcoming year. For the smokers, three boxes of cigarettes will cost you an additional R2.50 per week and an extra R127.92 in the year ahead, with this amount increasing to as much as R384 a year extra for those students who are burning through nine boxes a week. A trip to the bottle store will also set you back a few cents more with the proposed increase in the plastic bag levy, so frugal shoppers should reuse bags to avoid this.
Your sugar rush will cost more than just your waistline
Among the proposals is a new tax on sugar-sweetened beverages (SSB’s), which will come into effect on 1 April 2017, with an amount to be determined through legislation. According to an article published by Fin24 titled “The secret’s out – SA to get a sugar tax”, SSBs are set to include still and carbonated soft drinks, fruit juices, sports drinks, energy drinks, vitamin waters, sweetened iced teas, lemonades, cordials and squashes.
The purpose of this sugar tax has been cited as an aid in the fight against South Africa’s growing obesity and diabetes levels. According to the article above, researchers at the University of the Witwatersrand believe that a suggested 20% tax on SSBs could help reduce cases of obesity in as many as 220 000 adults in South Africa. Gordhan’s policy follows similar sugar taxes that have been introduced in countries such as France and Mexico, as well as several US states.
SA’s bid to keep rating agencies at bay
South Africa’s credit rating (or credit worthiness) is determined by credit ratings agencies, and has come very close to junk status after the finance minister debacle in December. If South Africa were to be rated as “junk”, we would carry a higher-than-average risk of defaulting on our credit. During the budget speech, Moody’s ratings agency downgraded SA’s Brics counterpart Brazil to junk status, which had an adverse effect on the Rand. A downgrade of the Rand could spell further economic turmoil for all South Africans, and this is why it will be vital for Gordhan to continue to steer us away from junk status
