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How worried should we be about speculation that Mboweni will increase taxes?

14 October 2020 7:00 PM
Tags:
SA Economy
Tito Mboweni
The Money Show
Bruce Whitfield
Peter Attard Montalto
PWC
corporate taxes
Intellidex
President Cyril Ramaphosa
MTBPS
tax hike
Personal taxes
Economic Recovery Plan
COVID-19
economic recovery
2020 Medium-Term Budget Policy Statement
Kyle Mandy

The minister's asked for a delay tabling the 'mini budget'. Ahead of the president's address to Parliament, the experts weigh in.

Finance Minister Tito Mboweni's asked for his tabling of the scheduled Medium-Term Budget Policy Statement (MTBPS) to be postponed for a week until 28 October.

The minister's previously said that unless tough decisions are made, a fiscal crisis will hit South Africa by 2024/25 if not sooner.

Where to cut and where to spend?

And how to weigh possible tax increases with an economy weakened even further by the national lockdown?

RELATED: 'Mboweni worries about rising expenses. Ramaphosa worries about trade unions'

Meanwhile, President Cyril Ramaphosa is set to outline the economic recovery plan for South Africa in Parliament on Thursday.

There's speculation that a cash-strapped government is looking to us, the taxpayers, for relief says Bruce Whitfield (but he doesn't see it).

The Money Show gets comment from Kyle Mandy, tax policy leader at PwC South Africa.

Mandy notes that from the supplementary budget review some months back it's already known that Treasury plans R40 billion worth of tax increases over the next three years.

R10 billion of that comes into play next year already... I am a little concerned.

Kyle Mandy, Tax policy leader - PwC

We also know that our tax burden is at record levels and we have very few options left and very few levers left to pull when it comes to raising additional tax revenues.

Kyle Mandy, Tax policy leader - PwC

In terms of the mini budget itself, when it eventually happens, it's unlikely we'll see any details of that. Hopefully at the very least the minister doesn't announce any additional tax increases and it would be very pleasant if he actually backtracked on the amounts and looked at alternative ways of collecting those additional tax revenues.

Kyle Mandy, Tax policy leader - PwC

In conversation with Intellidex's Peter Attard Montalto, Whitfield also considers what to expect from the president's address on Thursday.

Montalto comments on the contentious issue of social relief grants due to come to an end soon.

Treasury has said quite clearly that, as of last week when they were in Parliament they had not been directed to extend the grant. That obviously led to a swift backlash from civil society organisations.

Peter Attard Montalto, Head of Capital Markets Research - Intellidex

It comes down to affordability.

Peter Attard Montalto, Head of Capital Markets Research - Intellidex

Listen to Mandy and Montalto in conversation with Bruce Whitfield:


This article first appeared on 702 : How worried should we be about speculation that Mboweni will increase taxes?


14 October 2020 7:00 PM
Tags:
SA Economy
Tito Mboweni
The Money Show
Bruce Whitfield
Peter Attard Montalto
PWC
corporate taxes
Intellidex
President Cyril Ramaphosa
MTBPS
tax hike
Personal taxes
Economic Recovery Plan
COVID-19
economic recovery
2020 Medium-Term Budget Policy Statement
Kyle Mandy

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