“We need to strike a critical balance between saving lives and livelihoods, while supporting inclusive growth. This budget presents this balance.”
These were the words of Finance Minister Enoch Godongwana during his maiden National Budget address on 23 February 2022.
The Minister’s budget focused on collective participation and buy-in, ensuring that we steer the ship in the right direction. In supporting this long term perspective, he emphasised that “a swallow does not a summer make”.
The main highlights of the budget are laid out below in a one-page summary from AJM Tax. In addition to these key budget matters, here are two more notable aspects from the Budget.
Regulating crypto assets
Authorities around the world face challenging questions about crypto assets and their regulation. In light of this, the Intergovernmental Fintech Working Group (IFWG) published a position paper on crypto assets in June 2021. This set out a coordinated and phased approach to regulating crypto assets. Their recommendations include the following:
- the provision of crypto asset service providers as accountable institutions within the Financial Intelligence Centre Act (2001);
- the declaration of crypto assets as financial products under the Financial Advisory and Intermediary Services Act (2002). This will include crypto asset exchanges and platforms as well as brokers and advisors; and
- enhancing the monitoring and reporting of crypto asset transactions to comply with the Exchange Control Regulations of 1961.
A follow up paper addressing the risks posed by so-called ‘stable coins’, will be published by the IFWG. The National Treasury is also in the process of exploring measures to regulate electricity-intensive crypto mining, which is environmentally harmful.
Consumers: Fuel prices and RAs
Although no changes were made to tax-free savings account limits, there is an intention to review the fuel levy. The review will consider the structure of the fuel price to ensure that this supports a competitive economy. This will in turn have a positive impact on consumers.
Similarly, Retirement Annuities (RA’s) can now invest 45% of their assets offshore, which will benefit taxpayers upon reaching retirement.
By everyone working together in partnership, South Africa can tackle the challenges that might risk our economic and fiscal plans.
Listen to the AJM Tax post-budget panel below;
Being tax efficient is an important part of great financial management. In this blog, a group of South African tax experts at AJM Tax share their tips and explanations on tax issues. Learn everything you need to know about tax, from deductions you never knew about to retirement savings and capital gains. The first Tuesday of every month is Tax Tuesday.