WATCH: Why the tax system needs to stay stable

Cape Town - Finance Minister Pravin Gordhan must ensure that the tax system remains stable and predictable in order for South Africa to continue attracting foreign direct investments.

This is according to Charles de Wet, PwC Tax Partner, who told Fin24 in a studio interview that the budget is significantly under pressure, placing Gordhan in a very difficult position this year.

"There has been a number of changes in the economy. We've seen SARS collections being substantially down and this is his perfect opportunity to put new touches on the table and to raise the additional taxes."

De Wet noted that there are always increases in the sin taxes.

"There will definitely be increases and I think it is likely that those increases will be above the inflation rate to try and generate that additional revenue that he [Gordhan] needs to balance the budget."

One of the important things in terms of achieving economic growth and to make sure that people are happy to invest in South Africa, is that there can't be uncertainty as far as taxes are concerned, said De Wet.

Referring to the shock changing of finance ministers in December by President Jacob Zuma, which spooked the markets and investors, De Wet said Gordhan will have to maintain that the Treasury and South Africa are financially prudent and that the tax environment stays stable.

Watch: Charles de Wet speaks on what his ideal budget would look like in terms of tax

* Visit our Budget Special and sign up for our newsletter for same day action on Pravin Gordhan's speech.