E-tolls revolt weighed on budget - tax expert

2014-02-28 11:24 - Carin Smith
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Cape Town - The prospect of a revolt by taxpayers is reflected in the nature of the latest National Budget, according to Le Roux Roelofse, a tax expert of Deloitte.

"When the government saw the huge outcry against e-tolls, it realised it was faced by a taxpayers' revolt. That was a sobering experience for the government and reflects in the resultant unremarkable budget," said Roelofse at a post budget event hosted by Deloitte in Cape Town.

"I predicted that the budget won't be anything spectacular. Yet, that does not mean it was not an interesting budget."

The second factor that resulted in such an "unremarkable" budget in his view, is the Davis Tax Committee.

"The Committee is tasked with doing a holistic review of our tax system, which has not kept up with the changing economic world," said Roelofse.

"Don't be surprised, therefore, if we do not see any changes until the Committee comes back with its findings."

One of the issues the Committee could address, would be ways to handle multinational companies like Google and the way they pay tax, said Roelofse.

In his view this can only be addressed through global bargaining.

Tax morality

Finance Minister Pravin Gordhan's budget acknowledges that taxation is a contract between the state and its citizens.

"Gordhan talked of fairness. He is trying to create a sense of tax morality, a link between earning and spending," said Roelofse.

"He wants to create a sense that it is only right for the wealthy to pay taxes, but that the state must spend it well and fight corruption."

Roelofse said Gordhan's budget is not necessarily business friendly, but he realises that he needs the private sector on board to create jobs.

The budget figures show, however, that companies in SA are not profitable enough. That is why the economy has to grow so companies could pay more tax.

"Gordhan believes in miracles and relies on miracles. We are in for interesting times," said Roelofse.

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