Gordhan likely to increase income and fuel taxes, says DA

With economic growth in limbo; the Democratic Alliance has predicted that Finance Minister Pravin Gordhan may have been pushed into a corner to up taxes to raise at least R28 billion in the 2017-18 financial year.

Releasing its budget preview at a media briefing on Monday ahead of Gordhan’s budget announcement on Wednesday, DA MP Alf Lees said the party believed personal income tax and an increase in fuel taxes could be on the cards.

The contentious sugar tax on sweetened drinks was also predicted to come into law in this coming financial year.

“What this means is that whether you are rich, and taxed directly, or whether you are poor, and taxed indirectly, the minister is going to reach into your pocket and help himself to at least R28 billion to plug the fiscal hole in 2017-18,” said Lees.

MP David Maynier said last year R18.1 billion in taxes had been taken.

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“And if that is not bad enough, President Jacob Zuma and his cronies, inside and outside the ruling party, are reaching into your back pocket helping themselves to billions of rands,” he said.

But there were other options.

One included selling non-strategic assets, a process which had been “abandoned” despite the “good start” by selling government’s stake in Vodacom which raised R25.4 billion.

Another option was to cut spending on VIP protection services which will cost the country R1.3 billion in 2017-18; curbing catering, entertainment and venue rental which cost almost R2 billion in 2015-16 and cut spending on consultants which cost R5.4 billion.

Eliminating waste through irregular expenditure could also be curbed as the amount had almost increased dramatically from R26 billion in 2014-15 to R46 billion in 2015-16.

“Whether you have a high-paying job and drive to work, or you have a low-paying job and take a bus to work, or even if you have no job and take a taxi to look for work, you will be paying more because of tax increases,” said Maynier.

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