By Naadiya Adams – @Miss_Naadiya
As outlined by Health Minister Zweli Mkhize, the plan is to vaccinate 40 million South Africans in order to achieve herd immunity from the Coronavirus.
While the intention is admirable, economists are concerned about how it will be achieved.
This past week has been rumored with talks of a tax increase but economists say with the current state of the economy, the likelihood of a tax hike is minimal.
Economist Mike Schussler told Radio Islam government does have other options; there is an option to borrow more money, but we’d be setting ourselves up for another downgrade from ratings agencies. He does however speak about a short term loan that could be paid back through the selling of assets.
“Or we could just borrow in the short term, and sell some assets, South Africa still has assets to sell like an airport or a harbour, the frequencies that the cellphone operators like, we’ve got some mineral rights that we can sell.”
Schussler says that a tax hike is not the answer.
“Taxing more in this environment with the pandemic and load shedding is going to hurt the economy a lot. And even if we make it a temporary tax, we seeing temporary tax like the electricity tax then became a carbon tax which became permanent in nature.”
According to Schussler government has a contingency fund of a bout 5 billion rand, but that is still 15 billion rand short of what is needed to fund the vaccine. Furthermore, Schussler believes part of that fund has already been used to bail out SAA.
In light of a tax increase, Schussler says a tax revolt is not likely while a payment revolt is already being seen as people refuse to pay e-tolls.
Taxpayers can breathe easy for now, but February’s budget speech will largely dictate what 2021 will be like for many South Africans.
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