Sanlam : The Impact on Consumers' Pockets

Zuma says these announcements will surely impact people's approach to spending and saving. 'In most cases, we end up spending whatever tax relief we receive. One can also clearly see that the government is keen to encourage more people to save more in Tax-free Savings Accounts. In a sense, these actions at a consumer level mirror the government's attempt to encourage sensible expenditure and at a macroeconomic level.

As far as taxes that affect consumers across income bands are concerned, the Minister applied the tax increases in areas where people indeed have control over their spending. So the usual culprits all went up: The fuel levy increased by 30c/l, road accident fund levy is up 9c/l and the excise duties for alcohol and tobacco will have increases of between 6 per cent and 10 per cent.

Zuma concluded that while the Budget may not be friendly to the rich, it is sending some powerful messages.

'The taxation of the wealthy is not a uniquely South African phenomenon. It addresses the fundamental problem creating tension across the globe i.e. the wealthy are getting wealthier and poor getting poorer. The Finance Minister played a good hand by addressing this problem in the South African context.'