Tax pain certain in today’s budget
Ramaphosa's first priority will be to fix the spluttering economy, the engine of any change, but which has not been firing on all cylinders for a long time.
Former finance minister Malusi Gigaba. Picture: ANA PHOTO
Cyril Ramaphosa knew when he threw his hat into the ring last year in the ANC presidential succession race that if he ever made it to the highest office in the land, he would have his work cut out for him undoing the damage of the Jacob Zuma years.
His first priority will be to fix the spluttering economy, the engine of any change, but which has not been firing on all cylinders for a long time.
Creating jobs and providing the one million internships he promised in his State of the Nation Address is already a tall ask for an economy which has slid backwards to be only the third-biggest in Africa, and which is showing growth rates that are negligible.
We will get a clear indication in today’s budget speech, set to be delivered by Finance Minister Malusi Gigaba, whether the clever minds at Treasury are able to pull any more rabbits out of our national financial hat.
The government has to, firstly, find R50 billion – the amount by which projected revenue has fallen short.
Then, it has to conjure up funds to pay for the free tertiary education scheme promised by Jacob Zuma as an ANC election ploy, but which has left Ramaphosa holding the fiscal baby.
It also has to find money for the drought relief and water supply projects which are needed to ensure we never see another Day Zero scenario anywhere in the country.
There are only, realistically, two options open to him when it comes to generating revenue: by hiking personal taxes – income tax, fuel levies and sin taxes – or by increasing valued added tax from its current 14%.
Gigaba may slash spending, but that will not be enough.
Whatever happens in parliament today, it will hurt.
//
For more news your way, follow The Citizen on Facebook and Twitter.
