Budget 2024 is pro-consumers as long as you don’t smoke or drink

Finance minister Enoch Godongwana said in his Budget 2024 speech that government “is mindful” of the high cost of living and consumers could heave a sigh of relief to hear that the news was not as bad as they thought it would be. Grants will also increase slightly.

This is how consumers are affected directly:

If you drink or smoke, you will pay

The so-called sin tax for alcohol will increase sharply between 6.7% and 7.2% to add R800 million in extra revenue. This means that you will pay more for:

• Beer, alcoholic fruit drinks and ciders – 14 cents more for 340 ml
• Wine – 37 cents more per 750 ml
• Fortified wine – 63 cents more
• Sparkling wine – R1.19 more
• Spirits – R5.53 more.

Sin tax on tobacco products will increase between 4.7% and 8.2%, but this will not add any additional revenue, probably due to the impact of the sale of illegal cigarettes. This means you will pay more for:

• A pack of 20 cigarettes, cigarette tobacco and electronic cigarettes – 97 cents more
• Pipe tobacco – 57 cents per 25 g more
• Cigars – R9.51 more per 23 g.

ALSO READ: Budget 2024: a bottle of whiskey will cost you almost R6 more, vapes R3 more

You will pay more for plastic bags

The levy on plastic bags increases by 32 cents per bag.

You will not pay more for fuel levies and not less either

Godongwana did not increase the fuel levy or road accident levy, giving consumers tax relief of R4 billion, to mitigate the impact of high fuel prices on inflation. However, the carbon tax on fuel increases by 1 cent to 11 cents per lite from 3 April and by 3 cents to 14 cents per ilite for diesel, increasing the total tax on 93 octane petrol to R6.18 and to R6.06 for diesel.

Medical tax credits will stay

Although there was concern that medical tax credits will be removed to make way for paying for National Health Insurance, the rebates were not removed or changed. The bad news is that no increase means it does not keep pace with medical inflation.

ALSO READ: Budget 2024: NHI receives R1.4 billion allocation

No tax relief, but also no tax increases

Godongwana did not announce any increase in personal tax, but also no inflation related tax relief that is usually applied to give relief. This means additional revenue of R16.3 billion in tax for government.

Two-pot retirement system to start in September

From 1 September consumers who are members of a retirement fund will be able to withdraw up to R30 000 of their savings or 10%. Consumers will pay tax on their withdrawals at their personal tax rate and government expects to collect about R5 billion during the coming tax year to 2025 from these withdrawals.

ALSO READ: Budget 2024: No new bailouts for underperforming SOEs

Small increases in grants, while SRD grant stays

• The SRD grant of R350 per month for 9 million people is extended until March 2025  
• The older person grant for people between the ages of 60 and 74 increases to R2 185
• The older persons grant for people over 75 increases to R2 205
• Grant for war veterans increases to R2 205
• Disability grant increases to R2 185
• Care dependency grant increases to R2 185
• Foster care grant increases by R50 to R1 180
• The child care grant increases by R20 to R530.