The Finance Minister of South Africa assured people that should there be any unforeseen events, the economy was equipped to live up to the challenges. Different areas were dealt with in South Africa budget for the FY 2008-2009.
South Africa Budget 2009 At a Glance:
VAT registration has been made obligatory and is expected to contribute R1 million. In course of the South Africa budget, the government is returning as much as R10 billion to the tax payees.
Investment in venture capital funds have been provided with tax incentives. To encourage policies related to industrial sector, R5 billion tax subsidies have been shelled out.
For the construction of public transportation facilities, railways and roadways, the government alloted 6 billion Rand in addition to the allotment of funds already done in the course of country’s policies pertaining to medium term budget.
It was also made clear that another 6 billion Rand would be provided for enhancement of sanitation, housing and water infrastructures.
Taxation in South Africa Budget:
A personal tax reduction amounting to R7.7 billion was declared. This was applicable for income in all brackets. This tax cut may benefit the business owners and the income tax payees immensely but it will not make any difference to the non tax payees. Speculations are on that some adjustments have been effected in the salary bands and interest pertaining to contributions of medical aid, dividends and tax free allowances but it is being exceedingly felt that these may get neutralized owing to inflation. Nevertheless, the business firms along with the other companies form the core of the economy and are referred to as the driving force of the economy.
In fact, for the South Africa budget 2009, the Finance Minister had worked out strategies (tax incentives), pertaining to venture capital funds, corporate investors as well as individual investors.
As much as 1.5 billion Rand has been allocated for funding activities related to better educational institutions in the country. For rehabilitation of schools, the government sanctioned R2.7 billion. For carrying out nutritional programs in schools, another R1.8 billion was also assigned.
Land Reform Assignment:
R2.6 billion was alloted for various support programs related to agricultural activities.
The fiscal surplus was anticipated to be 0.8% of gross domestic product or GDP for the year 2008-2009. For the FY 2009-2010, the fiscal surplus has been predicted as 0.6% of gross domestic product and for the FY 2010-2011, the fiscal surplus is being estimated as 0.7% of gross domestic product.
Funding HIV/AIDS Programs:
R2.1 billion has been alloted for financing various programs related to HIV/AIDS. South Africa budget for FY 2008-2009, implies that there will be growth in the gross domestic product by 4%. It has been reckoned that this would further increase to 4.6% by the year 2010. The country’s net foreign reserves stands at USD$32 billion as of 20th February, 2008.