2022 is all but a turn of good fortunes as the finance Minister, Enoch Godongwana, endeavors to “put some money back in the pockets of South Africans”. The minister’s maiden budget speech seems to mark the end of a grim fiscal era and change South Africa’s economic narrative as the fiscal tide turns.

Perhaps to gain a deeper appreciation of this glimpse of light shed by Minister Godongwana, reminisce of ex-minister Mboweni’s penultimate budget speech signaled the gravity of the country’s fiscal position. Not only was the Republic’s state dire and Covid-19 stricken, but Treasury anticipated the largest tax shortfall of approximately R213 billion less than the prior year forecast. Among some of the memorable tax proposals included a reduction in the corporate tax income to 27% from April 2022, the personal income tax bracket was increased by 5% which was higher than inflation, sin tax increased by 8% as well as fuel levy which increased by 27c per litre. Such were the times, and it is in light of such a backdrop that Minister Godongwana’s speech brought some level of relief.

Albeit the 2022 budget speech shone rays of hope, it was in like-manner made against harsh challenging time periods in the country, marked by high levels of corruption as well as the highest unemployment rate (46.6% of the labour force per the expanded definition) in the world and the highest youth unemployment rate (77.4% per the expanded definition) and not to forget the devastating effects of Covid-19; just but to mention a few major problems. The minister’s dictum stressed that the Fiscal Framework was crafted in such a manner that extended support to the economy and public health services in the short-term, while certifying the sustainability of public finances in the medium term. Amid a full-blown pandemic, a budget for the country’s vaccination campaign was introduced, allowing more than R10 billion for the purchase and delivery of vaccines over two years. A contingency reserve was increased from R5 billion to R12 billion to cater for further purchase of vaccines and other crises.

Though the public finances were gravely outstretched, with the borrowing requirement remaining well above R500 billion in each year of the medium term, the speech injected some glamour of hope as the country’s economy was expected to rebound by 3.3 per cent in 2021, following a 7.2 per cent contraction in 2020. From a tax policy perspective, corporate income tax will be lowered from 28% to 27%, to stimulate growth and encourage investment. Coupled with the 27% corporate tax reduction for years ending on or after 31 March 2023, the use of the assessed losses brought forward will be limited to 80% of taxable income, leaving the balance of 20% subject to corporate tax at the new 27% rate. This will be implemented in conjunction with broadening of the corporate income tax base while consequently limiting interest deductions and assessed losses.

Rightly so, ‘now is not the time to increase tax and put recoveries at risk’. Apart from hikes of sin taxes, no other tax increases were announced in the budget. Carbon tax rate will increase from 1 January 2022 from R134 to R144 per tonne of carbon dioxide and from 6 April 2022, the carbon levy will increase by 1c to 9c per litre for petrol and 10c per litre for diesel. Excise duties on alcohol and tobacco will also increase by between 4.5% and 6.5% with immediate effect. Furthermore, Government is set to introduce a new tax on vaping products by way of a flat excise duty rate of at least R2.90/ml. Beer powders will also be encapsulated in the tax net with an excise equivalent to the powder rate of 34.7c/kg from 1 October 2022.

Even though the tax collection was better than expected this year with National Treasury expecting R182 billion more in revenues, the Minister raised concerns over the country’s public debt which rose to R4.35 trillion. Of this debt and for every collected rand in tax revenue, 17 cents is utilized to pay off interest. As such, should this debt not be reduced, it may lead to a bigger economic and fiscal crisis. On this note, pertinent to heed that the Minister had a stern warning to underperforming state owned companies as their future would be informed by their value creation without bailouts from the fiscus. In the same breath, South African Airways would not be receiving additional funding from state coffers, but Eskom and Denel will be allocated a further R88billion until 2025/26 and R3billion respectively.

While the economic road to recovery is long and hard, government intends to end the prolonged periods of economic stagnation through accelerated infrastructure investment aimed at supporting distressed businesses, creating jobs, supporting low-income households, student study funding, infrastructure projects and more importantly combating corruption in all sectors of government and economy.

The 2022 budget speech was nothing shy of the government’s concerted efforts to dig out of the financial whirlpool by stabilizing the gross debt and at the very least “put some money into the pockets of many South Africans”.


Companies: Financial years ending on any date between 1 April 2022 & 31 March 2023

TypeRate of tax
Corporate Tax28%

Companies: Financial years commencing on or after 31 March 2023

TypeRate of tax
Corporate Tax27%

Individuals and Trusts: Period 1 March 2022 to 28 February 2023

TypeRate of tax

Trusts other than special trusts

New tax tables and rebates

Taxable IncomeTax payable
R1 – R226 00018% of the taxable income
R226 001 – R353 100R40 680 + 26% above R226 000
R353 101 – R488 700R73 726 + 31% above R353 100
R488 701 – R641 400R115 762 + 36% above R488 700
R641 401 – R817 600R170 734 + 39% above R641 400
R817 601 – R1 731 600R239 452 + 41% above R817 600
R1 731 601 and aboveR614 192 + 45% above R1 731 600
Primary RebateSecondary Rebate (65 and over)Tertiary Rebate (75 and over)
R16 425R9 000R 2 997
Tax Thresholds
Below age 65R91 250
Age 65 to 75R141 250
Age 75 and overR157 900

Medical Scheme Fees Tax Credit

Persons Covered by a Medical Aid SchemeTax Rebate (ZAR) per month
For the first two individuals347
For each additional dependent234

Transfer Duty: Applicable where sale of property is not subject to VAT

Taxable Income (ZAR)Rates of Tax (ZAR)
1 – 1 000 0000%
1 000 001 – 1 375 0003% of the value above 1 000 000
1 375 001 – 1 925 00011 250 + 6% of the value above 1 375 000
1 925 001 – 2 475 00044 250 + 8% of the value above 1 925 000
2 475 001 – 11 000 00088 250 + 11% of the value above 2 475 000
11 000 001 and above1 026 000 + 13% of the value above 11 000 000

Retirement Fund Lump Sum Withdrawal Benefits

Taxable IncomeRate of Tax Payable
R1 – R25 0000% of the taxable income
R25 001 – R660 00018% above R25 000
R660 001 – R990 000R114 300 + 27% above R660 000
R990 001 and aboveR203 400 + 36% above R990 000

Retirement Fund Lump Sum Benefits or Severance Benefits

Taxable IncomeRate of Tax Payable
R1 – R500 0000% of the taxable income
R500 001 – R700 00018% above R25 000
R660 001 – R990 000R114 300 + 27% above R660 000
R990 001 and aboveR203 400 + 36% above R990 000

Please note that the points addressed herein are limited to a summary of the more significant budget highlights and proposals from the 2022 National Budget Speech. Not all aspects have been dealt with.

Article prepared by: Tinashe Chipatiso (Tax and Corporate Consultant)

For any queries, please contact:

  • Hassen Kajie (Entrepreneurial Business Services Director)
    M: (+27) 82 333 3389 | E: hassen@nexia-sabt.co.za
  • Yousuf Hassen (Entrepreneurial Business Services Director)
    M: (+27) 82 333 3376 | E: yhassen@nexia-sabt.co.za