The budget is going to bite: Tax increases of more than R25bn can be expected.

With our economic growth outlook at a paltry 0.5% and load shedding the new normal, tax increases are a given.

18.2.2020

In the upcoming budget speech on February 26, tax increases of more than R25 billion can be expected. This could be in the form of increases in VAT and personal income tax

With our economic growth outlook at a paltry 0.5% and load shedding the new normal, tax increases are a given.

Jeff Schultz, a senior economist at BNP Paribas SA, said that although the current wage agreement for union members in the public service would only expire in March next year, about 33% of employees in higher posts – who did not belong to unions – could be targeted for savings this year.

This, alongside other savings in the operating costs of departments, could bring savings of close to R100 billion over the next three years.Above-inflation salary increases are largely responsible for the increased expenditure.During a budget preview presentation in Johannesburg last week, PwC said the budget deficit for 2019/20 was estimated at 6.3% – the highest since 1992.

Schultz said the state’s onerous salary obligations were diverting money away from other social obligations and necessities.Ramaphosa said Finance Minister Tito Mboweni would announce various measures to curb expenditure and improve the fiscal position during his budget speech on February 26.

A large part of the pessimism reflected in this forecast is being laid at the door of Eskom’s load-shedding measures, which are thwarting economic growth, said Schultz.It is estimated that Phase 2 load shedding costs the economy R1 billion a day. With Phase 4 load shedding, losses shoot up to R1.9 billion a day.

But there are already scores of indications that the economy is treading water.In the 2019 budget, provision had already been made for about R10 billion in additional taxation.Mandy is of the opinion that an increase in VAT is possible because the government has few other options to increase its income.



Read more: City Press

What a wow!!! Some of our businesses are in trouble when it comes to 'Sin' Tax in the upcoming Budget Speech. 😥 Ay yo new dawn is really against us. ..come 2021 sivote t time for new struggles Already we earn peanuts 🥜🙆🏽‍♂️ 😭😭😭😭 Sesiya dakelwa mnje Fake news Going to further kill the golden goose - expect fewer and fewer golden eggs while they dry up completely

The 15% is already killin us 💔 WOW!!!!

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Yoh😩 It will keep getting worse cause they know their people will only complain on twitter that's it. Sifile mos thina Heee modimo.. 14% vat took years to Change to 15%, it's hardly 2 years you talk about increasing vat? Wow we in for hell We're paying for politician's security to keep them safe from other politicians.

tito_mboweni job is actually very simple, he must just fill up the bucket...🤔my prediction is that he will anyway defy logic by trying to open the two taps even more instead of covering the leaks 🙈 Failed country This is nonsense. Increase company tax and leave us alone We moving our businesses to tax havens, simple

CoruscaKhaya Bangasidakelwa

LETTER: Sugar tax is killing jobsThere is no solid evidence that the sugar tax has a tangible impact on curbing obesity Sugar is killing people too. It’s not healthy.

A personal income tax increase will make no sense at all. Household expenditure contributes over 60% of GDP, if the government wants grow our economy, it can't stifle consumer spending. We, taxpayers, are funding corruption. If the opressed don't riot after this then IDK No another VAT increase Wabona state o.

VAT away looters, one day this wake up and revolt.

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Japan lurches towards recession after tax shockJapan’s quarter-on-quarter GDP shrinks 6.3% — the biggest slide since a previous tax increase in 2014

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