Today's Labour News

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MboweniBusiness Tech writes that Finance Minister Tito Mboweni is considering his options to improve the current economic and fiscal position of SA ahead of his National Budget speech on Wednesday.

“We still have a gaping hole in the country’s fiscal position, too huge to close, caused by years of virtually stagnant economic growth, the decimation of SARS revenue collection capacity, rampant corruption and mismanagement at state-owned enterprises,” Nazrien Kader, group head of tax at Old Mutual, pointed out. He went on to add:  “Poor service delivery by key SOEs requiring massive bailouts from the state and the unsustainable, ever increasing public sector wage bill – add to that, the impact of the Covid pandemic – create the impression there is no end in sight.”  Kader said that minister Mboweni was not oblivious to the sentiments that any tax increases would not be tolerated in the current landscape.  “The perception is that the pool of individual tax payers is permanently shrinking with the uptick in emigration and exodus of professionals seeking greener pastures. For those left behind, with the number of retrenchments, shutting down of small businesses and salary cuts (never mind the lack of bonuses) being consequential damages of the pandemic, the expected dip in individual tax collections is real,” Kader pointed out. There was little appetite for increased taxes or – even the touted ‘once off’ tax – when there was so much scope for government to act, Kader opined. This included things such as cost-containment measures, reigning in spending, and using the resources at the state’s disposal to enforce good governance at SOEs.

  • Read the full original of the report in the above regard at Business Tech

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