Manuel on booze, houses and suntanning
Whether drowning your sorrows or celebrating your fiscal gains in 2005, both will be more expensive as Minister of Finance Trevor Manual has announced increases in excise duties on most alcoholic beverages on Wednesday during his Budget address.
Speaking in the National Assembly, Manuel announced general increases of up to 20%, but ensured buying a house and lying in the sun will now be cheaper.
From March 1, buying a house will cost buyers less as Manuel announced the reduction of transfer duties on properties.
This means a purchaser of a property costing R190Â 000 will pay no transfer duty, while a person buying a house for R400Â 000 will pay R2Â 300 less.
Investors also had reason to smile as he increased the annual exception for interest income and distributions from unit trusts.
For investors younger than 65, this was increased from R11Â 000 to R15Â 000 and for people older than 65 from R16Â 000 to R22Â 000.
This means that a 40-year-old individual investing R210Â 000 in a savings account at 7% a year is not taxed on the R14Â 700 received in interest.
A pensioner and spouse investing R275Â 000 each (R550Â 000 total) and earning 8% interest a year will also not pay tax on the R44Â 000 earned through interest this year.
Manuel also announced income tax relief for individuals of R6,8-billion in 2005/06.
People earning up to R35Â 000 a year will pay no tax, and someone earning R60Â 000 a year will have R500 more to spend at the end of the year.
A person earning R90Â 000 a year will save R920 a year, and one earning R300Â 000 should save R4Â 570 annually.
But on the downside, Manuel showed no mercy for so-called “sin taxes”.
The 2005/06 Budget saw tax on beer raised by 11 cents for a 750ml bottle and five cents for a 340ml can.
For the second year running, traditional African beers were the only beverages to escape increases in excise duty, which in real terms makes them 4,2% cheaper than last year.
Excise on fortified wine was raised by 23 cents a 750ml bottle and 18 cents a bottle on natural wine. Sparkling wines bore the brunt of increases in 2005 with a real increase of 20%.
This equates to an average increase of 64,67 cents a litre for a bottle of sparkling wine.
“Ciders and alcoholic fruit beverages go up by five cents per 340ml can,” said Manuel, while stating that duties on spirits will jump R1,47 a 750ml bottle.
He said the combined increase in sin taxes will raise an additional R1,6-billion in revenue.
Cigarettes will now also cost 52 cents more for a packet of 20 and fuel will become more costly on April 6, as Manuel announced increased fuel levies of 10 cents a litre on petrol and diesel.
But to lie in the sun and unwind with that expensive glass of wine or bottle of beer, Manuel made that more affordable by announcing that excise duty on sun-protection products has been abolished.—Sapa.