Faizel Patel, Radio Islam News – 22-02-2018
A professor from the Wits School of Economic & Business Sciences has told Radio Islam, Finance Minister Malusi Gigaba’s budget was a lot of tough to little hope.
Gigaba announced a raft of tax reforms in his budget speech tabled in Parliament on Wednesday, including a one percentage point increase in value added tax (Vat), a 52 cents per litre rise in the general fuel levy, and a higher estate duty tax rate of 25 percent for estates greater than R30 million.
Gigaba’s maiden budget also included spending cuts across government of over 85 billion over the next three years to help reign in the national debt to meet a revenue shortfall of more than 40 billion Rand.
The finance minister also announced that the so-called sin taxes will increase, while a sugar tax is to be introduced.
Professor Jannie Rossouw says he’s not positive about the budget and worried about the impact of the higher vat on the poor.
“The minister argued in the speech that it will hurt the middle class and the rich more, but I’m of the view that it will hit the poor the hardest, because poor people do not have capacity to adjust their expenditure to higher vat.”
Rossouw says the fuel levy will impact more on the middle class then the rich.
“The middle class and rich are owners of private vehicles. The poor use private transport and they use it more sparingly than what the middle class use their private vehicles.”
Rossouw doesn’t believe the polices of land expropriation without compensation and radical economic transition being discussed at the ANC’s 54th elective conference in Nasrec will filter through saying “it was a holding operation which also gave the feeling that Gigaba will not be in his position for much longer.”
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