Activists groups, organised business, economists and political experts have all expressed fear of a possible rise in taxes in Finance Minister Tito Mboweni’s Budget speech on Wednesday.
They have all called for more on job creation.
“The issue on everyone’s mind is obviously the bailouts of the state-owned enterprises (SOEs), particularly Eskom and SA Airways. Are the taxpayers once again supporting a system that should be supporting them?” said Cape Chamber of Commerce president Janine Myburgh
“I just hope that the direction that the Budget is not dictated by party interests, but is a message that brings hope of a more prosperous future to all the citizens of the country.”
She said a tax hike to fund SOEs would be unfortunate.
“The challenge to save Eskom is a complex one and we are most curious to see the approach that will be proposed on Wednesday.
“If ever there was a need for prudent innovation and all role players working together to support a turnaround, it is now,” Myburgh added.
She said talks of introducing a “luxury VAT” rate on luxury goods at the high end would have practical constraints that could make its implementation difficult.
Organisation Undoing Tax Abuse (Outa) chief executive Wayne Duvenage said that due to the dire financial situation and pressures facing Mboweni, he would be forced to do a “tactful dance between where he can squeeze without upsetting the electorate/public and not to scare off investors or upset the labour forces”.
“Let’s face it, SA’s tax base is too small and overstretched. Aside from adjusting the taxation brackets to capture a few more taxpayers and to squeeze another percentage or two from current tax payers, there is not much more to be expected from changes to personal income tax.
“Sin taxes and sugar taxes will be squeezed again, but what SA Revenue Service (Sars) needs to do is beef up its tax evasion units to improve revenues due to it from business under reporting and tax evasion, as well as tackling crimes and evasion from illegal importing and manufacturing in the tobacco industry estimated to be around R8billion a year.”
Duvenage said he did not expect VAT to be adjusted.
The Alternative Information and Development Centre said the country had a massive problem of unemployment, but government continued to revert to false solutions.
“If government was hell-bent on addressing mass unemployment and the resulting poverty and inequality it would use the Budget to signal a massive renewal programme based on state-led investment in a new industrial path,” the organisation said.
Economist Mike Schussler said he expected the minister not to increase tax because of the decline in economy and lack of jobs. “More investment is needed to boost the economy, and sort out the problem of Eskom, which will be the toughest decision. He will have to explain how (they’re going) to handle the debt problem and shift in spending.”
Political analyst Professor Somadoda Fikeni raised his concern about real job creation.
“The main item should be economy and real job creations.
“(Also), the massive risk on how to deal with state-owned companies like Eskom.
“In his speech we would also expect him to address the demands around education, bailing out SOEs, demands by the youth for free education and addressing of the problem of accommodation for university students,” said Fikeni.
Economist Dawie Roodt said the Budget would not deal or fix the damage caused by corruption at SOEs.
“I think the first step is to fire 600000 civil servants; there are too many civil servants in government departments.”@TheCapeArgus