Budget 2023: SA economy expected to grow, sin tax and social grant hikes
Finance Minister Enoch Godongwana says South Africa's economy is projected to grow by 1.4 percent over the next three years.
Godongwana gave the gloomy outlook on Wednesday afternoon as he tabled his budget in Cape Town.
He says the medium-term outlook has deteriorated after the size of the economy recovered robustly in 2022 to levels bigger than before the Covid-19 pandemic.
The fiscal deficit is projected at 4.2 percent of GDP.
The minister says it includes the impact of the partial takeover of Eskom's debt by government.
READ: Finance minister gives South Africans a tax breather
Godongwana in his budget speech said that they are proposing a debt-relief arrangement for R254 billion.
There'll be a direct takeover of up to R70 billion of the utility's loan portfolio in 2025/26.
Excise duties for alcoholic beverages and tobacco products will increase by 4.9%.
A can of beer will cost 10 cents more and a bottle of wine an extra 18 cents. A pack of cigarettes will go up by 98 cents.
- A 340 millilitre can of beer increases by 10 cents,
— ECR_Newswatch (@ECR_Newswatch) February 22, 2023
- A 750 millilitre bottle of wine goes up by 18 cents,
- A 750 millilitre bottle of spirits will increase by R3.90,
-A 23 gram cigar by R5.47,
- A pack of 20 cigarettes, the duty rises 98 cents. #Budget2023
The National Liquor Traders Association has welcomed the inflation-related sin tax hikes, saying they will ensure they stabilise their businesses and set them on a path to recovery and growth.
The association's Lucky Ntimane has urged the government to consider suspending liquor licence renewal fee increases.
"The growth and sustainability of our businesses, which are the backbone of the township economy, relies heavily on the accessibility and affordability of the goods that we sell. The inflation-related Excise duty increases will ensure that we stabilise our businesses and set them on a path to growth."
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"In light of the load shedding which continues to restrict our business operations, we call on government to supply liquor traders with financial packages that will enable them to access alternative energy sources and keep the businesses running optimally as we protect the over 200 000 jobs that are dependent on the tavern sector."
Minister Godongwana also says social grant beneficiaries will be getting a little bit more.
"The old age and disability grants increase by R90 on 1 April 2023 and a further R10 on 1 October 2023. The result is a total increase to R2 090.
"The child support grant rises from R480 to R510 on 1 October 2023, while the foster care grant increases from R1070 to R1130 over the same period.
