2. Budgets and taxes

Capital Expenditure

Refers to spending on creating social infrastructure, such as building schools, hospitals, and roads.

Current Expenditure

Money spent on consumable goods and salaries, including payments for government employee salaries and supplies for schools.

National Budget

Estimates the government’s expected income and spending for a financial year.

Fiscal Year

A 12-month period used for budgeting and financial reporting (usually running from 1 March to February 28/29 the next year)

Budget Surplus

Occurs when income exceeds expenditure.

Budget Deficit

Happens when expenditure is greater than income, leading to the need for borrowing.

PAYE (Pay As You Earn)

Tax withheld from salaries.

Progressive Tax System

A tax system where higher earnings result in higher tax percentages.

Capital Gains Tax

Tax on profits from selling second properties.

Define : Excise Duty

Levies on products like petroleum, alcohol, and tobacco.

Define : Sin Tax

Tax on harmful goods, such as cigarettes and alcohol.

What is Skills Development Levy

1% of total employee remuneration paid by employers.

What are Tranfer duties?

Taxes levied on the transfer of ownership of property or assets from one person to another.

What are Zero-rated Supplies

Goods and services that are charged at a VAT rate of 0%, such as basic food items.

Define : Direct Tax

A tax that is paid directly to the government, such as income tax.

Define : Indirect Tax

A tax that is applied to goods and services and paid by consumers through retail prices.

What is Value Added Tax (VAT)

A type of indirect tax charged on goods and services.

What are Custom Duties

Taxes charged on imported goods.

What is Company Tax?

Fixed tax rate of 27% on net profits of registered companies.

Define a Economic Management Tool

A tool used to manage the economy by stimulating growth or controlling inflation.

Define the Minister of Finance

The official responsible for budget preparation and implementation (Enoch Godongwana)

Define: Budget Reading

The process where the Minister of Finance presents the national budget, usually announced in February.

What does remuneration mean?

Remuneration refers to the compensation or payment received for services or employment, typically including salary, wages, bonuses, and benefits.

What does expenditure mean?

Expenditure refers to the spending of money for various purposes, often classified as capital or current expenditures.