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Eskom receives a further R88 billion to cover debt

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Despite his tough love towards ailing state-owned companies, Finance Minister Enoch Godongwana says government will keep its commitment to support Eskom. Godongwana is tabling his maiden budget speech in Parliament.

 He says that power utility Eskom remains to be in financial distress.  According to Godongwana, the state will continue extending financial assistance to the power utility while it looks for alternatives. But there will new no new money extended to SOEs.

 “To date, Eskom has been provided with R136 billion to pay off its debt with a further R88 billion until 2025/26. We acknowledge, however, that Eskom is faced with a large amount of debt that remains a challenge to service without assistance. The National Treasury is working on a sustainable solution to deal with Eskom’s debt in a manner that is equitable and fair to all stakeholders. Any solution will be contingent on continued progress to reform South Africa’s electricity sector and Eskom’s own progress on its turnaround plan and its restructuring. We expect Eskom to take further steps towards cost containment, conclude the sale of assets and implement operational improvements to enhance the reliability of electricity supply.”

Finance Minister Enoch Godongwana’s Budget Speech: 

 Tax relief

Godongwana’s budget speech has provided tax relief to the tune of R5.2 billion. He says this is to help support the economic recovery, provide some respite from fuel tax increases as well as boost incentives for youth unemployment.  

 He says the tax relief on Personal Income Tax and Corporate Taxes is to counter the effects of the inflation rate.

He has increased the tax threshold of taxpayers for this financial year.  People below the age of 65 years will only pay tax if they are earning R91 250.

 While only those between the ages of 65 and 74 years earning R141 250 will be taxed, and 75 years and older must earn R157 900 to be taxed.

“Madam Speaker, households and businesses are still under financial pressure and are coping with higher obligations, the effects of COVID-19 and increased fuel prices, now is not the time to increase taxes and put the recovery at risk accordingly.  We have decided to keep money in the pockets of South Africans.” – Additional reporting by Lulama Matya

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