The South African Chamber of Commerce and Industry (SACCI) has suggested that any major tax increase announcement during finance minister, Nhanhla Nene’s budget speech could be detrimental to the small and medium sized enterprises (SME) sector. The minister is expected to deliver his annual address on Wednesday, with all eyes on how government will seek to remedy the countries current economic woes.
With South Africa facing a budget deficit, Acting CEO Peggy Drodskie suspected there was a strong possibility Nene would be announcing an increase in taxes. But with SMEs seen as a point of particular growth for economic development in the country, she said it would be extremely unfortunate if the taxation levels of those particular sectors were increased.
Furthermore, the chamber was also concerned by the difficulties faced by members in relation to the countries fiscal policy, including income taxing of businesses, as well as difficulties with VAT refunds.
“We are very hopeful that what is coming out of the Davis Tax Committee will in effect; lessen those burdens on the SMEs. We certainly hope that the minister is going to indicate some progress on the implementation of the recommendations of the Davis Tax Committee,” she said.
As far as infrastructure is concerned, the South African economic growth rate is considered relatively low. Making comparisons to the United States, Drodskie said their growth was largely based on the foundations of a good infrastructure. Hence it was imperative South Africa followed a similar route.
“(We hope) that infrastructure will be a catalyst for growth, and we are hoping that we are going to find some indication as to the development that has taken place in the NDP,” she said, adding that they were hoping for answers as to how the private sector could participate more actively in progressing the NDP.
Also expected to be watching Nene’s budget speech with a keen eye is Black Sash advocacy Manager, Elroy Paulus, who suspected the minister would seek to find some form of balance during his address. But with a Black Sash holding a particular interest on the issue of social grants, Paulus expressed concern that the topic was not addressed during the recent State of the Nation address (SONA).
“We hope that the Minister of Finance is not going to follow that same trajectory in his speech today,” he explained, noting that more than 17.5 million people were currently dependant on social grants.
He said Black Sash would be particularly interested to see the extent of any increases in grant monies, and whether those increases were ‘decent’ compared to increases in other costs. Despite those expectations, he predicted the minister would spend a substantial portion of his speech indicating revenue stream, or where the countries tax money would be coming from.
And with the minister also set to address a possible bailout out for the country’s sole energy provider, Eskom, Paulus said community members need recognize such a bailout as a use of taxpayers’ money.
“Our money is being used to bailout almost private sector entities, partly owned by the state, that should have performed far more efficiently,” he explained. VOC (Mubeen Banderker)