Economist Dr Goolam Balim says Finance Minister Malusi Gigaba will face a grueling challenge with the mid-term budget set to be delivered in Parliament on Wednesday afternoon.
Gigaba will have to explain how he intends dealing with rising government debt and avoid ratings downgrades.
He will at the minimum attempt to bridge a roughly R40 billion shortfall in terms of revenue and the mere implications of that suggest that the propensity for South Africa to face further downgrades is real. His challenge is one that certainly previous finance minister's would not have had to face in terms of the depth of occasion.— Dr Goolam Balim, economist at Standard Bank
Balim says dwindling tax payments are only some of the financial constraints government is facing.
In an environment of weak growth, there is naturally a subsidence in tax payments. These have all been falling short off target. In addition to that, there does appear to be some inefficiencies that have crept into the Sars operating systems...— Dr Goolam Balim, economist at Standard Bank
Meanwhile the Small Business Institute (SBI) says tax should not be used as a 'sledgehammer' to fix anything.
The fact is government is broke, and certainly, we can't afford small business and all these people at this stage to be used as a cash cow somehow to fund grandiose schemes like saving SAA or fixing Eskom.— Cobus Bester , SBI national spokesperson
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This article first appeared on 702 : 'Gigaba will have to bridge a roughly R40 billion shortfall in revenue'