COMMENT: SA middle class is screwed
FINANCE Minister Nhlanhla Nene tried his best, but aside from the usual rise in sin taxes the increase in income tax means the middle class is monumentally screwed.
The middle class will not only pay more income tax, but will also have to deal with increases in petrol price, electricity levy, property transfer levy and Road Accident Fund levy.
Income tax rates will be raised by one percentage point for all taxpayers earning more than R181900 a year.
This will mean an extra R21 per month for those earning R200000 a year and R271 more per month for those earning R500000 a year.
For the the high end, those earning R1.5-million a year will pay R1105 per month extra.
The tax relief for those earning below R450000 a year will come as a welcome bonus, while those with higher incomes will feel like they are being legally mugged.
To add salt to the wound, the electricity levy will also increase from 3.5 cents per kilowatt hour to 5.5 cents per kilowatt hour. Motorists will pay an extra 30.5 cents per litre starting in April.
That's not all. There will be a 50 cents per litre increase in the Road Accident Fund levy, which currently stands at R1.04.
The unintended consequences will be a depressed retail sector, which is one of the major employers in the country. Retrenchments have already started and it could get worse.