South African taxpayers can look forward to good news in Wednesday's Budget, although tax breaks are not expected to reach last year's record levels.

Finance Minister Trevor Manuel is due to deliver his Budget speech in the National Assembly shortly after 2pm.

Economists are unanimous that Manuel has significant scope to ease the tax burden, but higher spending is likely to dissipate some of that benefit.

The overall relief package, to be directed largely at lower and middle income earners, is not expected to be as generous as the R15-billion put back into taxpayers' pockets last year.

As usual, "sin taxes" will rise, but there is unlikely to be any change to VAT.

Increases in old age and child support grants should beat inflation, while children aged seven and eight are due to begin benefiting from the welfare grant.

Infrastructure spending is set to rise and government has proposed an expanded public works programme to help create jobs.

According to economists, it is unlikely that Manuel will make changes to corporate tax, and there is an outside chance of a cut in the tax on retirement funds.

The personal tax threshold, and rebate, are likely to rise, while the brackets are expected to be adjusted to assist those at the lower end of the salary scale.

The top marginal rate of 40 percent should stay the same, although the level at which it kicks in may be raised from R240000 to about R260000.

There may be a limited relation of exchange controls, with the individual travel limit possibly rising to R1-million a year, and companies again allowed to invest 10 percent of cashflow offshore.

The markets will be looking at the budget deficit outcome -- the difference between spending and revenue collected -- as some economists have predicted an unprecedented surplus.

However, the consensus appears to be for a deficit of just less than one percent of gross domestic product - Sapa