There will be no increases in income tax rates and the VAT rate will remain unchanged, as government seeks to limit the negative effect of tax hikes on SA's already struggling economic growth.
In total, the Finance Minister Tito Mboweni's maiden Budget includes proposals to raise R15bn in additional tax revenue for the 2019/2020 financial year.
This will boost total estimated tax revenues to R1.4trn in 2019/2020.
Tax revenue estimates for the 2018/19 year, however, have again been revised downwards.
Treasury is now expecting a revenue shortfall of R42.8bn, an increase of R15.4bn over the R27.4bn estimated in the mini Budget in October.
The shortfall was mainly due to a combination of economic weakness, problems of poor tax administration by the SA Revenue Service, and higher-than-expected VAT refunds, said Treasury in its Budget review.
R15bn in additional revenue
Not raising personal income tax brackets means more individuals may fall into a higher bracket if they receive salary increases.
Treasury says this is expected to raise an additional R12.8bn in revenue, which makes up the lion's share of the additional revenue announced in Mboweni's maiden Budget.
Rebates and the tax threshold will be nudged up to allow a "small amount of relief for inflation".
The tax-free threshold has been upped from R78 150 to R79 000.
South Africans will be paying 29 cents more per litre for petrol and 30 cents more per litre for diesel.
- This includes the introduction of a carbon tax of 9c per litre on petrol and 10c per litre on diesel from June 5.
- The general fuel levy will be hiked by 15c a litre for petrol and diesel from April 3.
- The Road Accident Fund levy will be raised by 5 cents per litre from April 3.
In total, motorists will be paying R5.63 in taxes for every litre of petrol bought from June 5, and R5.49 for every litre of diesel. This is an increase from R5.34 and R5.19 respectively in the 2018/19 financial year.
The VAT rate was raised from 14% to 15% by former finance minister Malusi Gigaba in February 2018. It will not be adjusted this year, despite calls by trade union federation Cosatu and the EFF, among others, to move it back to 14%.
- INCOME TAX: Calculate what you'll be paying in 2019
As already announced in the mini Budget in October, the list of VAT-exempt items will be expanded to include white bread flour, cake flour and sanitary pads from April 1 this year. This is expected to cut tax inflows by R1.8bn.
Sin taxes on alcohol and tobacco will rise by above-inflation rate of between 7.4% and 9%, and are expected to bring in an additional R1bn in Treasury.
Excise duties on a 340ml can of beer will rise 7.4% from R1.61 to R1.73. Smokers will be paying R1.14 more for a box of 20 cigarettes.
Medical tax credits
There will be no change in the monthly medical tax credit for medical scheme contributions, which is expected to bring in an additional R1bn in revenue.