Treasury predicts economic growth without a plan to get there
JOHANNESBURG – During this year’s Budget Speech, the National Treasury made an optimistic prediction that South Africa’s gross domestic product (GDP) would grow by about 1.5 percent, which is more than double the real figure of 0.7 percent that the country achieved last year.
In addition, it is quite uncertain how the Treasury expects the country to achieve that number since the 2019/20 budget is not geared towards facilitating economic growth to any real extent.
None of the major tax categories saw any real changes that could help to alleviate the tax burden on consumers or companies, and no real measures were put in place to help stimulate foreign investment.
In fact, the increases to the fuel price as a result of the general fuel levy and the Road Accident Fund levy together with the introduction of carbon taxes are very likely to increase the cost of living for the consumer and business, further hampering GDP growth.
South Africa needs a growth-oriented budget, and the 2019/20 Budget is not it.
Mike Teuchert is national head of taxation at Mazars. The views expressed here are his own.
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