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Parties warn on super tax

Increase taxes on the wealthy, axe whole government departments, spend less and recover taxes from multinationals in tax havens.

These are some of the proposals from trade unions and opposition parties in the run-up to Finance Minister Pravin Gordhan’s Budget speech tomorrow.

Pravin Gordhan, Minister of Finance. Photo: Matthew Jordaan. Credit: Independent Newspapers

The Budget will be presented amid speculation that a “super tax” on mining profits and an increase in taxes for the rich may be introduced.

The National Treasury runs a budget shortfall, meaning it spends more than it receives in taxes. The government has to borrow to make up the diffe rence.

The DA’s finance spokesman, Tim Harris, says boosting growth should take precedence over increasing government revenue.

He said the party would prioritise spending on infrastructure as it believed this was a key component in boosting growth.

Harris said the DA was against tax increases as they would hurt growth. The proposed “super tax” on mining profits would harm the industry in the current climate.

The party would abolish such government departments as economic development, women, children and people with disabilities, public works, and sport and recreation.

The most savings would come from disbanding Sector Education and Training Authorities and the National Skills Authority, which the party described as “inefficient and overly bureaucratic”.

The projected savings would amount to R9 billion.

The Federation of Unions of SA believes that more consultation is needed before a mining “super tax” is introduced.

Trade union Solidarity believes the budget deficit should be controlled by cutting government spending.

The ACDP said it was “cautiously optimistic” that personal and corporate tax rates would not be increased because this would inhibit growth.

Cosatu was unable to comment immediately. - Cape Argus

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