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The Minister of Finance, Tito Mboweni, delivered the 2020
Budget Speech on the 26th of February 2020.

“Public workers Union concerned over wage bill cuts”,” A boon for first-time homeowners” “Tito Mboweni’s Budget hot seat is about to get even hotter “– just some of the terms used to describe this year’s budget by various bodies and, of course, the man in the street!

Here are a few important highlights:


  • A consolidated budget deficit of R 370.5 billion, or 6.8% of GDP in 2020/21, is projected
  • Gross national debt is projected to be R 3.56 trillion, or 65.6% of GDP by the end of 2020/21
  • Revenue is projected to be R 1.58 trillion, or 29.2% of GDP
  • Government has allocated R 230 billion over ten years to the restructuring of the electricity sector and the achievement of a stable electricity supply. The current electricity shortfall will ease as Eskom finishes critical maintenance
  • Excise duties on alcohol and tobacco products increased to keep pace with inflation
  • Fuel levy increases by 25c per liter (general fuel levy – 16c, road accident fund – 9c)
  • More than 18 million people receive a grant, which is a lifeline for many. In 2020, the grant values will increase as follows:
    • R 80 increase for old age, disability, war veterans and care dependency grants
    • R 40 increase for the Foster Care grant
    • R 20 increase for Child Care grants
  • Some relief on personal income tax with the reduction of the Income-tax brackets
  • Allowable contributions to tax-free savings accounts increased to R 36 000 per annum
  • Inflation adjustment to transfer duty rates structure. No transfer duty is payable on the purchase of a property valued less than R 1 million
  • Plastic bag levy increase of 25c in order to reduce plastic waste
  • Government will reduce the public sector wage bill as a share of overall spending. Last year the finance minister announced measures to realise a R 27 billion reduction in the state salary bill over three years by incentivising early retirement in the public sector. This year the cuts are going far deeper. National Treasury has proposed an R 160.2 billion cut in the wage bill for state employees in national and provincial departments over three years
  • SAA has been placed under business rescue which will lead to a radically restructured airline. Over the medium term, Government has allocated R 16.4 billion to settle guaranteed debt and interest
  • Renewed focus on illicit and criminal activity with the focus being on noncompliance of some religious public benefit organisations


  • Trusts other than special trusts – 45%
  • Dividends Tax – 20%
  • VAT – 15%
  • Company Tax – 28%
  • Retirement Fund lump sum withdrawals and Retirement Fund lump sum benefits and severance benefits – tables remain as is
  • Employer-owned vehicles and Travelling Allowances – remain unchanged 
  • Exempt-Interest:
    • Under 65 years old – first R 23 800
    • Over 65 years old – first R 34 500
  • Employee Tax Incentive (ETI) eligible income bands have remained unchanged


  • Tax-free threshold increases from R 79 000 to R 83 100
  • Medical Tax Credits has increased to R 319 for each of the first two dependents and R 215 for each additional dependant thereafter
  • Re-imbursive rate per km increased to R 3.98
  • Updated deemed cost rates per kilometer table
  • Subsistence Allowances:
    • R 452 p/d – meals and incidentals
    • R 139 p/d – incidental costs only 
    • SARS published rates for international subsistence – see SARS website 



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