Cape Town – Finance Minister Nhlanhla Nene’s mini budget speech revealed that he would look to tax collections to help reduce the budget deficit, according to a tax expert.
Nazrien Kader, national tax leader at Deloitte, said this was no surprise. “It looks like excess tax is going to come from individuals yet again,” she told Fin24.
“If you look at the collection estimates for 2015, we’re expecting VAT and company tax to be lower than the budget that we set and we expect individual tax to be R6bn higher than the budget.”
“That’s already telling us that the pressure on the individual tax base, a small pool of people, is even stronger than what it was in the past,” she said.
She said government had to look at economic stimulus and tax incentives to grow a tax base. “The minister was pretty silent on those two,” she said.
Uncertainty was the major concern in the taxation sector, said Kader. “Minister Nene is relying on Judge Dennis Davis [who heads up the tax review committee] and his proposals before we have certainty on where the taxes are going to come from.”
She did say that South Africans could feel positive following the speech and said Nene was fair in the way he presented his speech. “He has been quite clear that over the next three years, there is going to be a focus on tax collections,” she said. “I prefer to know where it’s going to come from, we just don’t know how.”
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