Last week Malusi Gigaba, then still Finance Minister, delivered a balanced budget, signalling a return to fiscal consolidation. The Budget targets a debt-to-GDP ratio of 56.2% by 2021, which represents a significant reduction in the debt-to-GDP ratio targeted in the Medium Term Budget Policy Statement last October. (more…)
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Is Budget 2018 enough to please Moody’s?
By raising South Africa’s VAT rate from 14% to 15%, the South African government indicated a willingness to take difficult (and unpopular) decisions in order to stabilise the fiscus. Coupled with the recent change in the President, this Budget should be enough to keep Moody’s on hold when they release their South Africa sovereign […]
Personal income tax buoyancy has run its course
South Africa’s tax measures have traditionally focused on personal income tax as an important source of revenue as this had always proven to be a particularly buoyant source of revenue. However, over the last years South Africa’s personal income tax collections have continued to underperform. (more…)
BUDGET 2018 COMMENT: No wealth tax but taxing the wealthy
In his 2018 Budget Speech, Finance Minister Malusi Gigaba has found a balance between raising taxes on the wealthy, broadening the tax base and providing a safety net for the poor. The rand appreciated somewhat and bond yields traded lower soon after the Minister started to speak, signalling firm approval from the markets. (more…)
BUDGET 2018: COMMENT – National Budget geared to instill confidence
Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group. (more…)
BUDGET 2018: COMMENT – Decision to raise VAT ‘inevitable’
The decision to raise VAT in Budget 2018 was ‘inevitable’, but risks of continuing to raise various taxes in the face of weak growth is why SA needs much higher economic growth rates. This is according to Professor Raymond Parsons, economist at the NWU School of Business and Governance “Despite its laudable goals and commitment […]
BUDGET 2018: COMMENT – Insights from Grant Thornton
General Comments: “We applaud the Minister for the statement in his Budget Speech today when he said: ‘Transformation calls for more than growth alone, it requires a fundamental shift in the way that wealth is created and shared. The structure of the economy needs to be transformed to allow for new ideas, businesses and economic […]
BUDGET 2018: COMMENT from the experts
“The projected GDP growth of 1.5% will be challenged by a VAT increase to 15% and the 52c/l increase on the fuel levy as these two factors will drive headline inflation to rise above expected levels in 2018. Additional taxes will put consumers under pressure and limit spending in the economy. We can expect the domestic […]