Latest news with #R18
The Citizen
3 days ago
- Business
- The Citizen
‘We have a National Treasury problem': Fuel levy hike defended amid criticism over tax strategy
At least R3.5 billion in revenue would be lost by not increasing the fuel levy, according to National Treasury. Petrol pumps are pictured at a filling station in Melville on 20 January 2021. Picture: Tracy Lee Stark The National Treasury has defended its decision to increase the general fuel levy in the budget 3.0 amid criticism over its broader tax policy. On Friday, officials from the Treasury and the South African Revenue Service (Sars) appeared before Parliament in a joint meeting of the Standing Committee on Finance and the Select Committee on Finance. They were responding to public submissions on the fiscal framework and revenue proposals, which outline South Africa's economic policies, revenue projections, and government expenditure limits. This follows the tabling of Finance Minister Enoch Godongwana's third national budget for the 2025/2026 financial year, after months of political impasse. The budget includes a fuel levy increase of 16 cents per litre for petrol and 15 cents for diesel, effective from 4 June. However, the Economic Freedom Fighters (EFF) are challenging the hike in court. National Treasury's revenue projections Treasury's head of tax and financial sector policy, Christopher Axelson, addressed the committee on the revised revenue outlook. Axelson noted that revenue projections had decreased by R61.9 billion compared to the budget tabled in March. This decline was driven in part by the withdrawal of proposed increases to value-added tax (VAT) and adjustments to zero-rated items. 'That increase was reduced slightly, but it still required a large amount of additional revenue to make sure we have a fiscally sustainable trajectory for our debt and debt-service costs, and because of that, this May 2025 budget does include R18 billion in additional revenue for 2025/2026 and has R1 billion in tax relief in 2026/2027,' the Treasury official said. He also indicated that a further R20 billion in unspecified tax policy adjustments is anticipated for the 2026 budget. To fund expenditure priorities, Treasury has opted for a range of tax measures, including no changes to personal income tax brackets or rebates, an inflationary increase in the fuel levy, and above-inflation hikes in excise duties on alcohol and tobacco. Diesel refund relief for primary sectors was also announced. ALSO READ: Budget 3.0: Fuel levy replaced VAT hike but is it the better option? Axelson pointed out that past personal income tax increases had failed to raise the intended revenue, while corporate income tax remains 'highly volatile'. 'Corporate income tax increases are the most damaging to growth, and if you reduce growth, it reduces the tax bases as well, so it is not as effective.' Axelson pointed out that a VAT increase was the most efficient revenue-raising option but had to be scrapped due to opposition. As a result, a bulk of the revenue shortfall was addressed by not adjusting personal income tax and rebates for inflation. He also explained that Treasury has aimed to avoid increasing taxes over the last five years in an effort to support economic recovery, adding that the country's tax system was 'progressive'. National Treasury defends fuel levy hike Moreover, Axelson responded to comparisons between the fuel levy hike and a VAT increase. 'The quantum is very different. The VAT increase over three years would have raised about R75 billion. Increasing the fuel levy by inflation is closer to around R12 billion.' He defended the levy hike, arguing that it had not been raised in the previous three budgets. 'Part of that was due to the very high oil, petrol and diesel prices [but] those have been coming down lately. The recent non-adjustment in the March budget was to provide relief for VAT.' READ MORE: VAT reversal overshadowed by fuel levy hike Axelson emphasised that the fuel levy is a significant source of state revenue, contributing about 5% to total tax revenue. 'This is a specific tax, a cents per litre, so these kinds of specific taxes, which are the same as excise duties, they need to be adjusted by inflation; otherwise, the real value of that tax will go down over time.' He warned that Treasury would lose about R3.5 billion in revenue by failing to increase the fuel levy. 'The vast majority of the tax revenue increase is all on the personal income tax side. Around R16.7 billion of the R18 billion in increases is all on personal income tax.' Watch the meeting below: Axelson told the committee that various alternative revenue proposals – such as eliminating the employment tax incentive (ETI), increasing corporate income tax, introducing a wealth tax, and partially adjusting tax brackets – will be considered in the 2026 budget. 'A lot of them are very good and interesting proposals which we are going to have to consider very carefully and hopefully have a more consultative process before the next budget.' He added that although the finance minister has the authority under the Customs and Excise Act to implement an interim fuel levy adjustment via a notice in the government gazette, Parliament has the right to intervene. 'We do hope the notice will be published quite soon [but] Parliament may decide to intervene [as] there is legislative oversight.' Tax policy criticised Civil society and political parties reacted strongly to the Treasury's presentation. The Budget Justice Coalition, one of the organisations that made submissions, rejected claims of a progressive tax system. 'Our tax system can look progressive on paper, but it doesn't actually work that way, and we know that all too well in a country that is marked by some of the highest levels of inequality,' the organisation's chairperson, Matshidiso Lencoasa, said. She argued that South Africa's tax policy burdens the poor, while wealthy individuals and corporations continue to exploit loopholes to their advantage. READ MORE: Fuel levy pain: Brace for possibility of petrol price hike in June Lencoasa further criticised the proposed VAT and fuel levy increases, describing them as 'blunt instruments' that would place a heavier financial strain on the country's most vulnerable populations. Pieter Faber, senior executive of taxation at the South African Institute of Chartered Accountants (Saica), also expressed concern. Faber said the institution cannot support further tax increases in an already high-tax environment, especially amid rising national debt and ongoing concerns about the lack of government accountability, as highlighted in the Auditor-General's report on local government this week. Fuel levy increase under scrutiny MK Party MP Des Van Rooyen criticised the delayed implementation of alternative proposals. 'My expectation was that most of the inputs would be accommodated in this budgeting cycle,' Van Rooyen said. He asserted that the fuel levy increase was more regressive than the scrapped VAT hike. 'There should be a thunderous response against this proposal.' Democratic Alliance (DA) MP Pieter Britz called for a fairer distribution of the tax burden. READ MORE: EFF files urgent interdict to stop proposed fuel levy hike EFF MP Omphile Maotwe strongly disagreed with Treasury's position on the fuel levy. 'National Treasury refuses to increase corporate income tax for ideological reasons and not practical ones. They oppose a wealth tax because their underlying assumption is that the state must serve those who already have wealth.' She also challenged the narrative of a progressive tax system. 'The claim that our tax system is progressive cannot be taken seriously,' Maotwe said, accusing the department of ignoring alternative proposals. 'It is clear that we have a National Treasury problem,' she added.
Eyewitness News
3 days ago
- Business
- Eyewitness News
Treasury defends fuel levy increase
CAPE TOWN - The Treasury has defended an increase in the fuel levy, saying if it doesn't raise it in line with inflation, it would become worthless over time. The fuel levy has been left unchanged for three years to mitigate the impact of high oil prices at the time it was frozen. The Economic Freedom Fighters (EFF) is going to court next week to challenge the legality of imposing an increase as part of the national budget, saying that the finance minister had failed to issue a government notice to this effect, nor had he introduced a bill in Parliament. The price of petrol will increase by at least 16 cents per litre on Wednesday. ALSO READ: • Ntshavheni says EFF free to challenge national budget in court • EFF accuses finmin of 'undermining' Parly in court papers seeking to stop fuel levy hike • MPs say impact of fuel levy increase will be 'far worse' than VAT hike • EFF accuses Treasury of replacing VAT increase with fuel levy hike • Automobile Association slams new fuel levy hike The Treasury said that increasing the value-added tax (VAT) rate could not be equated with raising the fuel levy. Responding to public submissions on the budget in Parliament on Friday, Treasury's head of tax policy, Chris Axelson, said that the fuel levy was the country's fourth-largest revenue source, contributing about five percent to total tax revenue. "This is a specific tax, a cents per litre, so these kinds of specific tax, which is the same as excise duties, they need to be adjusted by inflation, otherwise the real value of that tax will go down over time." Axelson said that by not adjusting the fuel levy, Treasury would lose about R3.5 billion in revenue. "The vast majority of the tax revenue increase is all on the personal income tax side. Around R16.7 billion of the R18 billion in increases is all on personal income tax." While the finance minister is empowered through the Customs and Excise Act to implement an interim fuel levy adjustment by a notice in the gazette, Parliament can intervene to change the duration before it's formalised in the taxation act.
The South African
4 days ago
- Business
- The South African
Hailey Bieber rockets to billionaire status with Rhode
Hailey Bieber has just shaken up the beauty world—and her bank account in a move that's sending shockwaves. Bieber's skincare brand, Rhode, has been snapped up by cosmetics powerhouse E.l.f. Beauty for a jaw-dropping R18 billion. Hailey Bieber, only three years into her beauty business journey, isn't stepping aside. Instead, she's stepping up. 'From day one, my vision for Rhode has been to make essential skin care and hybrid makeup you can use every day,' Bieber declared, according to Harper's Bazaar . 'Just three years into this journey, our partnership with E.l.f. Beauty marks an incredible opportunity to elevate. We can accelerate our ability to reach more of our community with even more innovative products and widen our distribution globally'. E.l.f. Beauty will pay R14.4 billion at closing, a mix of cash and stock. There's also a sweetener: an extra R3.6 billion could be paid out if Rhode continues to grow over the next three years. Rhode's meteoric rise is nothing short of spectacular. The brand, named after Hailey's middle name, launched in 2022. It quickly became a social media sensation, especially on TikTok, with its peptide lip treatments and 'glazing' products. In the last year alone, Rhode raked in over R3.8 billion in net sales. Hailey Bieber isn't going anywhere, as she'll stay on as Chief Creative Officer and Head of Innovation, guiding Rhode's next chapter. Her co-founders, Michael D. Ratner and Lauren Ratner, will also keep their hands on the wheel. 'We can't wait to bring Rhode to more faces, places, and spaces,' Bieber said, hinting at global ambitions that could soon see Rhode's products on South African shelves. E.l.f. Beauty's CEO, Tarang Amin, is just as excited as Rhode further diversify their portfolio with a fast-growing brand that makes the best of prestige accessible. We are excited by Rhode's ability to break beauty barriers, fully aligning with E.l.f. Beauty's vision is to create a different kind of company. Rhode is a beautiful brand that we believe is ready for rocketship growth,' he said. This deal is a sign of the growing power of social media-driven brands and the global appetite for innovative skincare. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
5 days ago
- Business
- IOL News
Msunduzi Municipality warns residents about consequences of unpaid services
Msunduzi Municipality Mayor Mzimkhulu Thebolla tabled the city's budget on Wednesday. Image: Supplied Residents of Msunduzi Municipality in Pietermaritzburg, KwaZulu-Natal Midlands, have been warned of the consequences of continuing to refuse to pay for services, such as water, electricity, and rates. Mayor Mzimkhulu Thebolla issued the warning when he tabled the city's R18 billion 2025/2026 budget on Wednesday. Out of this budget, R9.6 billion would focus on service delivery, while R8.5 billion would be on operational expenses. He said the city had encountered an increase in electricity theft through illegal connections. 'Our Operation Qoqimali (collect the bills) Campaign is about stopping the prevailing culture of non-payment. 'The electricity theft is a crime, like all forms of illegal connections, a criminal offence,' he said. Video Player is loading. 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Next Stay Close ✕ Thebolla said the city loses tens of millions of rand in revenue per year, which he said was a theft of revenue that is much needed to enhance service delivery. 'We call for this practice to stop because to combat this, we will continue to work with the community and law enforcement to arrest the offenders and impose hefty penalties.' He said the city was now prepared to adhere to the residents' demand for better service delivery. 'This budget has been crafted with your (residents') concern at heart, focusing on the service delivery priorities. 'This would include improving public electricity lighting, stabilising power supply, reducing water losses, and safeguarding vital infrastructure. 'In formulating this budget, we have ensured that it is based on a financially sound plan and stabilise the city's finances while prioritising service delivery,' he said. Thebolla said capacitating revenue collection work streams to support the Operation Qoqimali Campaign would help the city to stabilise its finances. 'The project management office has been established to take charge of each aspect of the city's revenue value chain. 'This includes rolling out prepaid electricity meters, dispatching bills, resolving disputes, and implementing credit control and debt collection measures such as issuing summons against debtors,' said Thebolla. He said the court was in support of the city's effort to deal with people who were ignoring paying for services. 'That is why we have already issued 40,000 letters of demand to defaulting customers who run up high service bills and fail to pay the city.' He said the municipality had been forced to increase tariff by external elements such as the National Energy Regulator of South Africa (Nersa), which authorised Eskom and municipalities to increase electricity cost by 13.32% from July 1, and the Umngani/Uthukela Water Board, which proposed 15% increase of water tariffs for 2025/26 financial year. 'These adjustment factors in inflation include a margin dedicated to the infrastructure upgrade and maintenance, which is essential to alleviate pressure on aging and over-stretched electricity infrastructure. 'These adjustments are necessary to ensure sustainability, reliability and continued investment of service delivery,' said Thebolla. He said the city has employed 400 workers through the Expanded Public Works Programme to go house-to-house to identify indigenous homeowners to be exempted from certain charges. 'So far, we have 5,978 people benefiting from the programme, and we aim to reach even more. 'To make this possible, we have increased the household income threshold to R6,110, ensuring that more low-income families access this vital support,' he said. During a media briefing, Thebolla said the construction of the Integrated Public Transport Networks (IPTN) project to transform the public transport system, which was left unfinished in 2022, while it was supposed to be finished in 2021, would soon continue. He expressed disappointment upon taking office in 2019 when the city was removed from the Integrated Public Transport Network (IPTN) programme. 'We have worked tirelessly since then, attending to all the challenges that the Department of Transport and the National Treasury cited as the reason for the removal of Msunduzi from that requirement. 'We are very excited to announce that we have now been re-accepted, which comes with its terms. There is R45 million that is set aside for mainly critical projects,' he said.
The Citizen
6 days ago
- The Citizen
Locals fell prey to fraud worth thousands of rands
Fraudsters over the past weekend left more than three locals stunned after scamming thousands of rands through electronic transactions. According to the police, the scams varying from digital theft to in-person deception, have robbed individuals of their hard-earned money, proving that fraudsters are becoming increasingly sophisticated in their tactics. 'To protect yourself from fraud and cyber threats, never respond to emails or phone messages claiming to be from your bank that request personal details, as legitimate banks will never ask for this information via email. Never share your online ID, password, or PIN with anyone, and avoid writing them down or saving them on your desktop. Always ensure you log off or sign out after completing an internet banking session, and never leave your computer unattended while logged in. Avoid doing online banking in public areas or on computers accessible to strangers. Regularly change your PIN and passwords, set reasonable transaction limits on your accounts, and only provide credit card details to trustworthy companies. Lastly, if an offer seems too good to be true, it probably is – always remain cautious and vigilant when dealing with financial transactions,' said Captain Eddie Hall, spokesperson of SAPS Witbank as he warns the public against cases like this. For one unsuspecting victim in Watermeyer street on May 23, a simple phone notification turned into a nightmare. According to police a man was woken up by the sound of his phone beeping, and checked his account only to find that R18 700 had been withdrawn via a PayShap transaction—an app he never authorised for such use. The realisation was sudden as the reality of cyber fraud hit home. On May 22, there were a few cases reported. In Strydom Street a man encountered three individuals – two women and one man – who claimed to be employees of a national fuel company. They assured him they were assisting customers with their points cards for petrol purchases. Trusting them, he allowed them to take his picture and handed over his ID details. What followed was financial devastation – R81 000 was withdrawn from his bank account across multiple locations. In another incident in Uthingo Park, Tasbet Park, a woman found herself unknowingly tricked by a scam that exploited trust and familiarity. According to police she received a message on WhatsApp, supposedly from her pastor, requesting an urgent money transfer due to a network issue. Without questioning the legitimacy of the request, she transferred R3 000 to the provided account number, only to later receive confirmation that her pastor's number had been hacked. 'I never suspected it was a scam – I genuinely believed I was helping my pastor. My trust in him made me certain that his request was genuine, and I acted with a kind heart, simply wanting to support someone in need. It never crossed my mind that I could be deceived,' she said. In another incident, a resident in Bankenveld Estate fall prey to an attack which came in the form of unexpected online money transactions. On May 14, he noticed unusual deductions from his Absa account. Upon contacting the bank's fraud helpline, he was informed that his account had been cloned, resulting in a staggering loss of R39 524.64. Breaking news at your fingertips … Follow WITBANK NEWS on our website, Facebook, Twitter, Instagram or TikTok Chat to us: info@ At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
