CAPE TOWN- Treasury plans to collect around 80% of its revenue for the 2018/19 tax year from consumers via indirect taxes that affect a larger portion for the South Africa population, Tertius Troost, tax consultant at Mazars, said in reaction to Finance Minister Malusi Gigaba’s Budget 2018.
National head of taxation at Mazars, Mike Teuchert, added that these so-called “stealth taxes” seem to be Treasury’s only available option.
“It is interesting to note that Treasury seems to be admitting that there has been a marked decline in the collection of personal income taxes. This has in part been attributed to bad economic growth, as well as an apparent increase in tax avoidance by taxpayers,” Teuchert said.
Managing Director of tax and exchange control at Geneva Management Group, Ruaan van Eeden, said Budget 2018 was a particularly difficult one, also needing the pressure to secure greater revenue with the desire not to burden the taxpayer too much.
Van Eeden added that he found it encouraging that Gigaba mentioned the fact that the personal tax increases in recent times have affected higher income earners significantly, reduced bracket creep adjustments will, in Van Eeden’s view, not provide real relief due to inflation.
While it is encouraging to note the concerns about the need intervene so that the unemployment rate can come down, the Budget Speech does not include tangible proposals for how government intends to address this issue.
Photo Credit- idiva.com
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