Overview of the 2023 budget speech

The minister of finance, Enoch Godongwana, presented his budget speech before parliament. Cornerstone would like to provide you with a summary of the main points without getting bogged down in the political jargon.

improve their systems and increase their revenue-raising capabilities. As a result, we expect SARS will not become any easier to deal with going forward, as they are under ever more pressure to collect more taxes and reduce unnecessary refunds.

Cornerstone has listened attentively to the Minister of Finance’s budget speech for the upcoming 2023–2024 tax year. We believe there are a few key takeaways that all businesses and individuals should keep in mind during the coming year.

The highlight of the speech was the announcement that there would be a tax incentive for renewable energy spending to ease the stress on households and businesses caused by load shedding. The most significant incentive is for businesses, which can deduct 125% of all renewable energy investments for two years beginning March 2023. This means that if your business spends, SARS will allow your business to reduce the income it gets taxed on by R125 for every R100 that was actually spent. This incentive is interesting because there is neither a minimum nor a maximum. This incentive is interesting because there is neither a minimum nor a maximum. In essence, if your company (not an SBC) pays R1 million to install solar power, you would save R337,500 in corporate income tax. This expansion in Section 12B is exciting as it allows companies to install renewable energy without being impacted by load shedding. The more modest incentive for individuals only applies to rooftop solar panels and is valid for one year beginning March 2023, with a rebate of 25% of the cost of the panels, up to a maximum of R15,000. While this sounds disappointing, it is not quite as bad as it might first appear.

The Minister specifically called this a “rebate,” and rebates reduce the amount of tax you need to pay, not the amount of income SARS taxes you on. In other words, the incentive applies after your income is multiplied by your tax bracket percentage. For example, if you are in the 36% tax bracket, an R15,000 rebate would cover R41,667 worth of your income, thus putting more money back into your pocket and making solar power more accessible.

It was said that SARS did better than expected and brought in R93,7 billion more in taxes than planned over the past year. In practice, we have seen the effect of this as SARS is becoming more stringent and heavy-handed with audits, rejecting disputes, and demanding payments. We have also seen a rise in the number of taxpayers who are caught avoiding or not paying taxes. There is also a proposal to increase SARS funding, specifically to

The only other notable news from the budget speech that should be relevant to almost everyone is that there are no changes to the business income tax or VAT rates. Also, individuals tax brackets, tax rebates, and medical aid credits will only go up by the amount of inflation.

There are a few interesting points that are worth mentioning

• Government is considering revisions to the ‘two-pot’ retirement system to be effective 1 March 2024

• The sugar tax will remain unchanged for two years going forward

• Alcohol and tobacco tax will increase by 4.9% from 1 March

• Public sector wages will increase depending on the ongoing negotiations with unions

In the end, the budget speech was much shorter than expected, and a lot of attention was paid to SARS’s ability to collect taxes in order to pay for government projects and rising debt costs.

Cornerstone Financial Services Group, marketing@cornerstonefsg. co.za, www.cornerstonefsg.co.za

Shumani Industrial Equipment is the official distributor of Kalmar reach stackers and empty-container handlers in South Africa. “We currently hold the biggest fleet of Kalmar port equipment in South Africa,” highlights MD Victor Nemukula.

The Kalmar Essential reach stacker gives more value for money without compromising on quality. Built on the proven G-Generation platform, these machines are reliable, robust, highly efficient and are available with either EU3/Tier 3, EU4/ Tier 4F or EU5 or Korea Stage V emissions standards compliant engines.

Kalmar equipment is available for outright purchase or short term rental at affordable rates. “Most companies that require this equipment either do not have the capital outlay to purchase outright, or do not want to put it on their balance sheet,” explains Nemukula.

To cater for these clients, Shumani has financial muscle to offer longer term rental if needed. As the largest owner of Kalmar equipment in its short-term rental fleet, Shumani can rent out these units on a flexible basis for up to 24 months.

“We are the only 51% black-owned, Level 1 BBB-EE in the country that can offer forklifts and warehouse equipment, construction equipment and cleaning equipment on both outright purchase, long- and short-term rental in South Africa,” comments Nemukula.

Over the past eight years, Shumani has built up its in-house technical capabilities to provide services around the country. It strives to offer its customers 24/7 service and a two-hour response time in major metropolitan areas for all its equipment.

Looking ahead, the port and warehousing market continue to lead the way in terms of growth. “We are already seeing robust growth going into 2023 in these two market sectors,” reveals Nemukula. “New products will be announced this year once the necessary logistics have been finalised,” he concludes.

Shumani Industrial Equipment, +27 (0) 861 748 6264, www.shumani-industrial.co.za