Reddy believes the rich have had it good

Durban billionaire Vivian Reddy Picture: Gcina Ndwalane/Independent Media

Durban billionaire Vivian Reddy Picture: Gcina Ndwalane/Independent Media

Published Feb 23, 2017

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Durban billionaire Vivian Reddy celebrated his 64th birthday on Budget day and, in the coming months, he will be poorer.

“But government will be richer,” he said, reacting to the main tax increases announced by Finance Minister Pravin Gordhan in his Budget speech yesterday.

But the super rich, who will be hit by what entrepreneur Reddy described as a “very aggressive Budget”, should not complain too much.

“It means less money for the luxuries. Instead of two Rolls Royces, they will have to buy one Rolls Royce,” said Reddy, chairman of the Edison Corporation.

And the wealthy, who knew that tax increases were on the cards, should realise that the increases could have been even higher, as they are in other countries, Reddy said.

“All in all, this is not a bad thing. It means we will just have to work harder and make more profits,” he said, adding that, while he thought the tax increases were aggressive, he also felt Gordhan had delivered a fair and “balanced” Budget.

“We, the wealthy, have had it very good, and we need to be prepared to uplift the poor and make the country a better place.

“Paying higher taxes is the right thing to do. We have to transform the economy.

Read also: Billionaire Reddy offers shares in plush hotel

“It’s a pro-poor Budget. It is not anti-rich; the minister is taxing the super rich.”

Reddy is well-known for giving generously to the needy and yesterday Childline KZN helped him celebrate his birthday by presenting him with a framed collage highlighting projects that had been successfully undertaken through his contributions.

He is the charity’s main donor and saved it from closure five years ago.

The finance minister announced there would be a new top personal income tax rate of 45 percent for people with taxable incomes of more than R1.5 million, up from 41 percent, and an increase in the dividend withholding tax from 15 percent to 20 percent.

With 28 percent corporate tax and now a 20 percent dividend tax, it means 48 cents in every rand would go to the government, he said.

When companies made a profit, they tended to take out a dividend, he said. Reddy said that in his case, he would not be taking a dividend, but would be investing more money into his company to create more jobs.

“We should be grateful that there was no increase in VAT,” he said.

Meanwhile, families around the country hoping to get on the property ladder have just been given a R4500 boost by the finance minister because he has just upped the threshold above which transfer duty has to be paid.

There has until now been no duty payable on homes valued at R750000 or less.

Anything above that figure and transfer duty had to be paid on a sliding scale, with a prospective home-owner having to pay R1 500 on a house valued at R800 000, for instance.

Now, however, in the wake of yesterday’s Budget, the threshold has been increased from R750 000 to R900 000.

“And that is a saving of R4 500 for the prospective owner,” explained Jonathan Acutt, the managing director of Acutts estate agency.

Welcoming the move “with open arms”, he said that it was all about helping people get housing.

“It’s a very positive step in the affordable housing market and will have an impact for the first-time buyer and stimulate buyer confidence. There will be activity, and this will help the entry-level buyer climb on to the property ladder,” he said.

Grant Gavin, owner of Remax-Panache, described the decision as “brilliant”.

“It is getting harder and harder to get on to the property ladder, so every little bit of assistance from the government helps. It’s a saving,” he said.

Buyers knew exactly what they had to come up with in terms of a deposit, but were often “stumped” when they learnt they also had to find extra money for the transfer duty, he explained.

Making the announcement, Gordhan told the National Assembly that the relief was an “important measure” to support middle-income groups.

The local tourism industry is also upbeat about Gordhan’s plan to give the sector an additional R494million for promotional purposes.

Sadha Naidoo, chairman of the Tourism KZN board, said there were no details yet, but the additional funding would probably go to SA Tourism for international marketing.

“International marketing is very expensive because it has to be paid in foreign currency,” Naidoo said.

“There will be a spin-off for us for the whole country, in terms of tourists coming in.

“Tourism is on a growth trajectory and is seen as a primary economic sector. We have just broken the 10million threshold of tourists coming to the country,” he said.

Charles Preece, of the KZN branch of the Federated Hospitality Association of South Africa, and leading KZN hotelier Mike Jackson welcomed the additional promotional funding.

Jackson described it as “great news”. He hoped Tourism KZN would get an increase in its marketing budget.

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