Bad News for Smokers, Drinkers & Motorists – #Budget2021

Written by on 24 February, 2021

By: Lindelani Mbatha

Finance Minister Tito Mboweni has warned that the country’s gross loan debt will increase from R3. 95 trillion in the current fiscal year to R5. 2 trillion in 2023/24.

Mboweni has been delivering the 2021 budget speech in Parliament on Wednesday afternoon.

He outlined how government will collect the expected R1. 21 trillion in taxes during 2020/21, which is about R213 billion less than the 2020 Budget expectations.

This is the largest tax shortfall on record.

Mboweni says however, the country’s borrowing requirement will remain above R500 billion in each year of the medium term.

South Africa expects more COVID 19 vaccine to arrive in the country, Mboweni says government has allocated more than R10 billion for the purchase and delivery of COVID 19 vaccines over the next two years.

“In support of government’s quest to inoculate 67 percent of the South African population, the National Treasury will inject an amount of R9 billion to the country’s COVID-19 vaccination programme. Of this amount, the Department of Health is allocated R6.5 billion to procure and distribute vaccines,” explains Mboweni.

With more than 17 000 million grant beneficiaries, the minister announced that, the social assistance grants for the old age, disability and care dependency grant will increase by R30 rand and the child support grant by R10.

“R30 increase for the old age, disability and care dependency grants to R1890, R30 increase in the war veterans grant to R1910, R10 increase in the child support grant to R460, R10 increase for the foster care grant to R1050,” states Mboweni.

On the highly anticipated announcement on beverages, Mboweni says as from today alcohol, wine and tobacco products will increase by 8%.

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It is also not a good day for drivers as fuel levies will be increased by 27 cents per litre, comprising 15 cents per litre for the general fuel levy, 11 cents per litre for the Road Accident Fund levy and 1 cent per litre for the carbon fuel levy.

As South Africa ranks amongst the unsafest countries in the world, the minister says government will over the next three years allocate more than R200 billion to ensure the safety of the country through an efficient and effective criminal justice system.

Mboweni further says SARS, SARB and the Financial Intelligence Centre are working jointly on combating criminal and illicit cross-border activities through an inter-agency working group.

On land, Mboweni says government has allocated more than R100 billion to address land restitution in the country.

“Government plans to finalise 1409 restitution claims at a cost of R9.3 billion over the next three years to achieve redress and equitable access to land. The Department of Agriculture, Land Reform and Rural Development has also set aside R896.7 million for post-settlement support. This will include the recruitment of approximately 10 000 experienced extension officers,” says Mboweni.

This 2021 budget framework puts South Africa on course to achieve a primary surplus and by doing this, government debt will stabilise at 88.9 per cent of GDP in 2025/26.

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