Parliament - Finance Minister Pravin Gordhan on Thursday said while no decisions have been taken on what form tax increases will take during next year’s budget, they would not hurt the poor.
“We have a progressive tax system. It doesn’t hurt the lower middles classes and the poor and that has been an important trend that we’ve put into our into our fiscal landscape that we need to sustain into future,” Gordhan said while briefing Parliament’s committees on finance and appropriations a day after he delivered the medium-term budget policy statement (MTBPS).
The MTBPS proposes tax increases of R13 billion.
Gordhan told MPs he did not believe a tax revolt was on the cards.
“No, I’m not worried about a tax revolt. I think we have very transparent budget processes. ..and the additional taxes will have to be explained to the people who have to pay them,” he said.
The minister did however warn about a trust deficit between the have and have-nots.
“One of the international phenomenons by the way is that all global elites are beginning to get worried about is as you know is the trust deficit between elites and citizens. Six months ago that was something you whispered about in these international fora, today you talk about it openly as a key concern that people have.”
Gordhan said while the South African economy faced a difficult road ahead, government would not be cutting services for the poor.
“On the service delivery point, let me be very emphatic, that as government we are absolutely clear that we have not reached a fiscal point where we need to hurt the poor.”
Instead, the minister said government would focus on getting more out of service providers for less money.
“There’s a lot of room…to ensure that the poor are not affected, that the poor are in fact supported…and we need to often focus our minds not so much on the fact that less money might be going into a particular infrastructure project, but the efficiency with which that money is actually spent,” said Gordhan.
“Should a school be built for R70 million when elsewhere it can be built for R40 million rands? No.”
African News Agency