Budget 2020: Moody's likely to downgrade SA, says economist
While many taxpayers are no doubt welcoming the news they'll be paying less income tax - an economist feels the Finance Minister's budget won't do any favours for our crediting rating.
It came as a surprise when Tito Mboweni said during his Budget Speech yesterday that adjustments will be made to personal income tax brackets - offering relief of around R2 billion to already burdened taxpayers.
"There is some real personal income tax relief. This budget means that a teacher who earns on average R460 000 a year, will see their taxes reduced by nearly R3 400 a year. Hard-working taxpayers, who earn on average R265 000 a year, will see their income tax reduced by over R1 500 a year."
"Our income tax system is progressive, and the adjustments reflect this. Someone earning R10 000 a month will pay 10 per cent less in tax. Someone earning R100 000 a month will pay about 1.5 per cent less," Mboweni said.
READ: South Africans can't afford another VAT hike, says economist
Value Added Tax (VAT) will remain at 15%. Mboweni, who tabled the country's R1.9 trillion budget in Parliament, announced plans to tighten government spending, including a major cut to public sector wages.
A huge concern is national debt which is expected to rise to R3.5 trillion by the end of the 2020/2021 period.
Local economist, Ntokozo Nzimande says the situation is very worrying.
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