FF Plus welcomes tax increase

2013-02-27 21:41 - Sapa
(Picture: Shutterstock)

Johannesburg - The Freedom Front Plus welcomed the absence of drastic tax increases to supplement a deficit in the national Budget, unveiled on Wednesday.

Finance Minister Pravin Gordhan was, however, paying a high price in that the budget deficit increased from 4.5% to 5.2%, party leader Pieter Mulder said in a statement.

"The government will need R100bn annually just to pay the debt. If the minister's dangerous economic balancing act goes awry, the South African plane will nose-dive into the ground."

Mulder said if Gordhan's prediction of economic growth was correct, he would hopefully succeed in ensuring the "economic plane" would get out its nose-dive over the next few years.

"It is disappointing that the minister had found it necessary to increase the fuel levy with 15%. It will have a far-reaching impact on the economy, inflation, and on every individual."

Mulder said it was in the country's interest for Gordhan to send a strong message to ratings agencies. The government had to show it was serious about combating corruption, increasing growth, and enforcing financial discipline in the public service.

"Against this backdrop, the FF Plus welcomes the measures which had been announced to combat corruption," said Mulder.

With R120bn extra budgeted for social assistance, Mulder said the country was not at a point to turn around the increasing dependence of 16 million citizens on the state.

This could pose problems in future years if tax income could no longer pay for social grants.

"If grants are then inevitably reduced, an 'Arab Spring' or revolutionary circumstances could be found in South Africa," Mulder said.

* Visit our Budget Centre for full coverage of the 2013 Budget Speech, including a sin tax and personal tax calculator.

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