Cape Town - The South African Treasury would not divulge to members of parliament on Thursday which tax categories - whether personal or corporate - would be affected in the February budget.
Finance Minister Nhlanhla Nene was asked during a session of three parliamentary finance committees if he could provide more detail of which tax categories would be affected by tax changes, but he would not be drawn on specifics.
Asked if he was not concerned that the threat of new taxes would inhibit investment in the economy, Nene said he wanted to be “very clear” that the aim of tax changes would be to enhance the taxation system, improve tax efficiency and improve revenue to the fiscus. “Economic growth will be a key consideration (in making the tax changes),” he said.
Lungisa Fuzile, the treasury director general, noted that changes could be expected in the February National Budget, while Nene joked to MPs that he was pleased that there was speculation about what changes could be made, but he was not going to divulge any further details of what was envisaged.
Fuzile reported that government proposed “a structural increase in revenue” over the medium term. Policy and administrative reforms “are expected to raise at least R12bn in 2015/16, R15bn in 2016 and R17bn in 2017/18.
Consideration would be given to the recommendations of the Davis Tax Committee headed by Judge Dennis Davis. “Details will be announced in the 2015 budget,” said the DG.
While Nene has dodged descriptions of his prudent fiscal policies as “austerity” measures, the DG said in order to narrow the deficit and stabilise the debt over the medium term, government proposed a fiscal package that reduced growth in spending by lowering the 2014 budget expenditure ceiling by R25bn over the next two years.
At the same time tax policy and administration changes would be made to increase revenue. This would raise some R27bn over the next two years.
The plan is to lower the expenditure ceiling next year from R1.105 trillion to R1.095trn in 2015/16 and from R1.184trn to R1.168trn in 2016/17.