2023 Budget Speech Commentary: Discovery Group

Johannesburg  - Following the Finance Minister's Budget speedch delivered this afternoon, Discovery Group' several experts passed commentary saying, overall the Group does recognise that there are significant fiscal challenges and little room for increasing the tax burden.  It said that South Africa needs to adopt collaborative models to address the major social challenges facing our country and this requires a well-coordinated approach encompassing social security reform, health regulatory reform and education investment.

Guy Chennells, Head of Product, Discovery Employee Benefits said, “The solar panel tax incentive of a 25% rebate of the cost of the panels will be welcomed by many South African homeowners – but it only applies for 2023, so swift action is needed to benefit from it".

Professor Roseanne Harris, Head of Policy and Regulatory Affairs at Discovery Health said, “We welcome the inflationary adjustment of the medical scheme tax credits, with the 4.9% increase announced at this afternoon’s National Budget Speech. These are vital to many of our members in retaining their medical scheme cover specifically in the context of very tough economic conditions.  We hope that the proposals to expand access to lower cost medical scheme cover will allow more tax-payers being able to get the benefit of this valuable support for accessing cover.”

“We also welcome the additional allocation announced today by the Finance Minister, to Health which specifically focuses on retaining health-workers.  We believe that retaining and training health professionals is a key priority for our health system. We have an overall shortage of healthcare professionals and serious concerns around the pipeline.  The private and public sector need to work together to address this challenge as health professionals are core to health delivery."

On retirement funds, Guy Chennells said, “We’re very pleased to see the tax-free withdrawal amount at retirement increased, for the first time in many years, by 10% to R550k – providing much needed tax relief to retiring members.

“Today’s National Budget Speech didn’t give any new details on the impending two-pot retirement system but reiterated the March 2024 start date. Unfortunately without clear details and implemented legislation, it is becoming hard to see how that date will be achievable.”