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PEOPLE'S GUIDE ISSUED BY

RSABUDGET2023
A joint publication between National Treasury and South African Revenue Service #RSA Budget #RSABudget2023
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Media@treasury.gov.za
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WHAT IS THE In February each year, the Finance Minister tables the national budget, whereby he announces government’s spending, tax and borrowing plans for the next three years. The national budget divides money between national
BUDGET? departments, provinces and municipalities.
INFO

HOW IS THE 1. Departmental guidelines indicating budget 3. Budget proposals are submitted to National Treasury 5. Budget recommendations are made to Ministers’ Committee 8. Budget documents are prepared
information requirements are issued and deliberated on 6. Medium Term Budget Policy Statement signals 9. Main Budget is tabled
BUDGET PUT 2. Departments prioritise their programmes and compile 4. Allocation proposals are considered by interdepartmental the upcoming Budget 10. Parliament deliberates and adopts a Budget
TOGETHER? spending plans and service delivery commitments committees of Directors-General 7. Final allocations are decided in Cabinet 11. Sent to the President for signing into law

MR. ENOCH GODONGWANA – MINISTER OF FINANCE

NAVIGATING
AN UNEVEN
ECONOMIC
RECOVERY
Countries worldwide are Government is responding to time of the 2022 MTBPS. Growth to reduce financial pressure on the
experiencing a negative these conditions with stable and is expected to recover to 1.8 per utility, supporting more mainte-
combination of high inflation balanced policies and measures to cent in 2025. These growth rates nance spending and the transition
and lower growth. The South address emerging fiscal risks. The are well below what is required to to renewable solutions.
African economy is projected to 2023 Budget reduces the consoli- create jobs and eradicate poverty. Over the next three years, gov-
slow down because of severe dated budget deficit to its lowest In this context, government ernment will spend R7.08 trillion,
electricity outages, weaker per- level since 2017/18 and protects aims to boost economic growth primarily on measures to enable
formance in the world’s largest the public finances. These measures through three pillars. The first is long-term growth and cushion
economies and persistently prevent the build-up of systemic ensuring a clear and stable macro- the poor and vulnerable from the
higher inflation. risks to the financial system, protect economic framework, the second is effects of weak economic growth.
The improvement in precious the value of savings and build implementing reforms in key areas Apart from the one-year exten-
mineral prices that supported eco- investor confidence. of the economy, particularly energy sion of the COVID-19 social relief of
nomic growth and tax revenues In 2021, the South African and transport, and the third pillar distress grant, additional allocations
over the last two years is ending. economy grew by 4.9 per cent. supports improved state capacity. prioritise education, safety and
There is significant pressure on The economic growth estimate In the past year, embedded security and infrastructure-related
households as the cost of living for 2022 is revised upwards to energy generation regulations spending.
rises. As a result, tax collections are 2.5 per cent from 1.9 per cent at have been loosened, giving mu- This Budget navigates an un-
expected to be less positive and the time of the 2022 Medium Term nicipalities and firms more freedom even global and local economic
government spending needs to Budget Policy Statement (MTBPS). to generate power and implement outlook by outlining clear policies
be more careful while measures However, the estimate for 2023 is off-grid solutions. Government will to boost economic growth, address
to improve economic growth gain revised downwards to 0.9 per cent, provide R254 billion in debt relief the rising cost of living and deal
momentum. compared to 1.4 per cent at the to Eskom over the medium term with severe power outages.

ENGLISH | NATIONAL TREASURY #RSABUDGET2023 | A PEOPLE’S GUIDE TO THE BUDGET 1

ENGLISH | NATIONAL TREASURY

2023
BUDGET
HIGHLIGHTS
1. Taxes remain government’s
main source of income, followed
by borrowing.
2. The social wage, which includes
community development,
employment programmes,
health, education and social
development, is government’s
largest spending area.
3. Social grants will increase in line
with CPI inflation.
The R350 grant will continue
until 31 March 2024.
4. Despite the low growth

A MOVE TOWARDS ENHANCED ECONOMIC GROWTH projection of 0.9 percent,

government is committed
to economic and social
Economic growth has slowed in mainly in the energy sector. Reforms new energy projects. Eskom has also development.
the last decade due to structural aimed at stabilising the electricity secured agreements with the private 5. Government will provide R254
economic constraints. These supply have been strengthened by sector to generate 2 000 megawatts billion in debt relief to Eskom as
include persistent and intense new interventions overseen by the of additional power. In the long part of broader energy sector
reforms.
power supply disruptions National Energy Crisis Committee. In term, the objective is to achieve a
6. Interest payments continue to
as unplanned outages have the short term, the committee aims balance between energy security, increase, crowding out spending
increased since last year, reduc- to reduce the severity and frequency efficiency and costs. Transformation on essential public services such
ing the energy available to the of load-shedding by addressing of the electricity sector will ensure as health and basic education.
entire economy. key challenges at power stations, Eskom’s sustainability and foster
To unlock higher economic reducing the burden on electricity competition in the market to ensure
growth, government aims to im- generation and centralising the that more capacity is added to the SEE NEXT PAGE
plement key economic reforms, regulatory and approval process for grid, increasing energy availability.

spending over the next three years

is estimated at R903 billion. State- THE JOB CREATION
owned companies remain the largest
contributor to public-sector capital
INITIATIVE
investment, spending a projected The presidential employment
R302.1 billion over the next three initiative has created over a
years. Provinces and municipalities million short-term jobs over the
are expected to spend R209.8 billion past two years.
and R190.3 billion on infrastructure, The next cohort of 255 000
respectively, over the same period. young people will take up posts
Public housing built through as school assistants in over 22 000
the human settlements development schools from 1 February 2023. The
grant in provinces is expected to Social Employment Fund currently
INFRASTRUCTURE SPENDING total R45.9 billion over the next employs 47 408 participants through

FOR INVESTMENT AND GROWTH

three years. Although these assets 26 partners, and 50 000 jobs will be
are transferred to homeowners, this added. As part of this initiative, more
spending is a substantial govern- than 45 000 participants have been
The economic recovery plan reduce unemployment and pov- ment contribution to the built en- enrolled in youth service placements.
announced in October 2020 links erty, total capital investment, which vironment. Spending on economic
infrastructure investment and amounted to 13.1 per cent of GDP in infrastructure, mainly by state-owned
related institutional reforms to 2021, needs to increase significantly. companies, accounts for 78.3 per
support higher economic growth. Over the past decade, weak growth, cent of the medium-term estimate.
Government is working on rising spending pressures and the These funds are used to expand
several reforms to strengthen the financial support provided to state- power-generation capacity, upgrade
management of public infrastruc- owned companies have reduced and expand the transport network,
ture. Many of these involve pooling government’s ability to invest in new and improve sanitation and water
resources with the private sector in infrastructure. Private-sector invest- services. Social services infrastructure
blended finance initiatives to fund ment has also fallen for a variety of accounts for 17.6 per cent of the
and implement infrastructure projects reasons. As a result, total capital total, of which health and education
more effectively. investment has declined. account for 5 per cent and 7 per cent,
To grow the economy and Public-sector infrastructure respectively.

2 A PEOPLE’S GUIDE TO THE BUDGET | #RSABUDGET2023

 NATIONAL TREASURY | ENGLISH

1 SOURCES OF GOVERNMENT
INCOME IN 2023/24 3 SOCIAL GRANTS
2022/23 2023/24
R1 787.5bn | 84.2% TAXES STATE OLD AGE GRANT R1 985 R2 085
STATE OLD AGE GRANT, OVER 75 R2 005 R2 105
R283.7bn | 13.4% BORROWING
WAR VETERANS GRANT R2 005 R2 105
DISABILITY GRANT R1 985 R2 085
R51.6bn | 2.4% NON-TAX REVENUE
FOSTER CARE GRANT R1 070 R1 125
CARE DEPENDENCY GRANT R1 985 R2 085
GOVERNMENT
2 IN 2023/24 SPENDING CHILD SUPPORT GRANT R480 R505
GRANT-IN-AID R480 R505
SOCIAL
R378.5bn | 16.9% DEVELOPMENT

DEBT-SERVICE
R340.5bn | 15.2% COSTS

BASIC
R309.5bn | 13.8% EDUCATION

19.6 million
COMMUNITY
R259.7bn | 11.6% DEVELOPMENT

R259.2bn | 11.6% HEALTH people to receive social grants

by March 2026
R36 billion
ECONOMIC
R237.6bn | 10.6% DEVELOPMENT

R227.3bn | 10.1% PEACE &

SECURITY
is allocated to the COVID-19 social
relief of distress grant to provide beneficiaries with R350 per month
POST-SCHOOL EDUCATION
R135.6bn | 6.0% & TRAINING
The Budget will increase the values of permanent grants in line with inflation.

4 THE BUDGET SUPPORTS ECONOMIC GROWTH AND SOCIAL DEVELOPMENT

0.9 per cent R3.60 trillion R809.4 billion R825.8 billion R2.8 billion
real GDP growth is expected is allocated for community is allocated to support the is allocated for basic services, is allocated as part of the Township
in 2023, before improving to development, employment provision of equitable access housing and public transport, and and Rural Entrepreneurship
1.8 per cent growth in 2025 programmes, health, education to healthcare services over spatial transformation and urban Fund to support 120 000
and social protection over the next 3 years development over the next 3 years township and rural enterprises
the next 3 years

5 ESKOM DEBT-RELIEF
6 GOVERNMENT
100
88.2 87.7 86.4 85.4 84.4 84.2 83.6

PROGRAMME NON-INTEREST &

80

INTEREST PAYMENTS
60
Per cent

R254 billion 40
will be transferred from Eskom AS A SHARE OF TOTAL 20
11.8 12.3 13.6 14.6 15.6 15.8 16.4
to the government balance sheet
to reduce financial pressure EXPENDITURE 0
2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26
on the utility Non-interest spending* Interest payments * Non-interest expenditure is total spending by government excluding interest paid on debt.

#RSABUDGET2023 | A PEOPLE’S GUIDE TO THE BUDGET 3

 ENGLISH | NATIONAL TREASURY

2023 TAX
PROPOSALS
PERSONAL INCOME TAX TAX RATES

HOW DO THE PERSONAL INCOME TAX INCOME TAX: RETIREMENT FUND LUMP SUM BENEFITS
CHANGES AFFECT YOU? The rate table that applies from 1 March 2023 is as follows:
The 2023 Budget provides tax relief by announcing an adjustment of personal income tax Taxable Income (R) Rate of Tax (R)
brackets and rebates in line with the expected inflation rate of 4.9 per cent. The amount
an individual can earn before being required to pay tax for the tax year from 1 March 2023 R0 - R550 000 0% of taxable income
to 29 February 2024 is adjusted as follows:
R550 001 - R770 000 18% of taxable income above R550 000
TAX THRESHOLDS TAX YEAR: 2022/23 TAX YEAR: 2023/24
Below age 65 R91 250 R95 750 R770 001 - R1 155 000 R39 600 + 27% of taxable income above R770 000

Age 65 to 74 R141 250 R148 217 R1 155 001 and above R143 550 + 36% of taxable income above R1 155 000
Age 75 and over R157 900 R165 689 Source: National Treasury

These thresholds are a result of the new tax rebates: INCOME TAX: RETIREMENT FUND LUMP SUM WITHDRAWAL BENEFITS

TAX REBATES TAX YEAR: 2022/23 TAX YEAR: 2023/24 The rate table that applies from 1 March 2023 is as follows:

Primary (age below 65) R16 425 R17 235 Taxable Income (R) Rate of Tax (R)

Secondary (age 65 and over) R9 000 R9 444 R0 - R27 500 0% of taxable income
Tertiary (age 75 and over) R2 997 R3 145
R27 501 - R726 000 18% of taxable income above R27 500

SIN TAXES R726 001 - R1 089 000 R125 730 + 27% of taxable income above R726 000

R1 089 001 and above R223 740 + 36% of taxable income above R1 089 000
INCREASES IN ALCOHOL
AND TOBACCO DUTIES
Source: National Treasury

Specific excise duties on alcoholic beverages and tobacco products will increase by 4.9 per cent. TRANSFER DUTIES

INCREASES BY: The duty rate table is adjusted with effect from 1 March 2023. The first R1.1 million
Malt beer 10c per 340ml can of the value of property acquired is free from transfer duty. The new rate table is as follows:
Unfortified wine 18c per 750ml bottle Taxable Income (R) Rate of Tax (R)
Fortified wine 31c per 750ml bottle
R0 - R1 100 000 0% of property value
Sparkling wine 9c per 750ml bottle
Ciders and alcoholic fruit beverages 10c per 340ml can R1 100 001 - R1 512 500 3% of property value above R1 100 000
Spirits R3.90 per 750ml bottle R1 512 501 - R2 117 500 R12 375 + 6% of property value above R1 512 500
Cigarettes 98c per packet of 20
R2 117 501 - R2 722 500 R48 675 + 8% of property value above R2 117 500
Heated tobacco product sticks 73c per packet of 20
Cigarette tobacco R1.10 per 50g R2 722 501 - R12 100 000 R97 075 + 11% of property value above R2 722 500
Pipe tobacco 33c per 25g
R12 100 001 and above R1 128 600 + 13% of property value above R12 100 000
Cigars R5.47 per 23g
Source: National Treasury

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