For South Africans who have been planning to quit smoking, now is the best time to do that as they will now have to pay roughly 68 cents more for a packet of cigarettes after Finance Minister Pravin Gordhan announced yet another increase in the so-called “sin taxes” and hit consumers of alcohol and smokers where it hurts most in their pockets.
A 340-millilitre can of beer will cost 9 cents more, while a bottle of whiskey will go up by nearly five Rand. The increases take effect immediately, Gordhan announced when presenting the 2014 Budget in Parliament.
The general fuel levy will be limited to the inflation-related 12 cents per litre from April 2, and the Road Accident Fund levy will increase by 8 cents.
However, there was also good news coming out of Gordhan’s Budget Speech.
He announced a personal income tax relief of R9.25 billion and 40 per cent of the relief goes to South Africans earning below R25 per year
Companies on the tax register now stand at more than 2.3 million.
Gordhan said an increase in the tax-free lump sum amount paid out of retirement funds from R315 to R500 has also been proposed.
It will benefit lower income people who did not benefit from deductible contributions.
“Complementing this tax reform, a new top-up retail savings bond will be introduced by the Treasury this year, allowing for regular deposits into a government retail bond. It will also be accessible to community savings groups such as stokvels (clubs of twelve or more people serving as rotating credit unions),” he said.
