Lower and middle-income earners will receive tax breaks, but motorists will be hit by an increase in the petrol and diesel prices, finance minister Trevor Manuel announced in his budget speech on Wednesday.

Lower and middle-income earners will receive tax breaks, but motorists will be hit by an increase in the petrol and diesel prices, finance minister Trevor Manuel announced in his budget speech on Wednesday.

The total Budget is R334-billion, up from R292-billion in 2002/03.

The general fuel levy will increase by three cents a litre on leaded petrol and between 6,2 cents and 9,2 cents a litre on unleaded petrol.

The general fuel levy on diesel will increase by four cents to 85 cents a litre, while the Road Accident Fund levy will increase by three cents a litre, from 18,5 to 21,5 cents a litre.

Most of the increased spending goes on social services, including up to R8,3-billion over three years for HIV/Aids medicines, and infrastructure spending increased by six per cent. Black economic empowerment gets a boost, with R10-billion for new ventures and business expansion over the next five years.

Small businesses get small breaks including an increase in the threshold for taxation to R5 million.

"Of the total relief, 56 per cent accrues to taxpayers earning less than R150 000 a year, and 23 per cent to those earning between R150 000 and R250 000 a year," Manuel said. The primary rebate rises to R5 400, meaning taxpayers under 65 years of age and earning less than R30 000 a year will not pay any tax. The threshold for those older than 65 jumps to R47 222 a year. A person under 65 earning R120 000 a year will pay R4 640 less in tax each year,” Manuel said.

To read the full Budget speech click here .

Original article from Car