South Africa’s 2018 national budget came with a raft of tax increases indicating the country’s desperation to address a growing gap in its public finances. These include a hike in Value Added Tax from 14% to 15%. Sibonelo Radebe asked Lee-Ann Steenkamp to highlight the key tax developments.
What is your general impression of the budget speech?
I’m cautiously optimistic. In his own words, the minister of finance Malusi Gigaba noted this was a tough but hopeful budget. The budget speech echoed the theme of rebuilding and restoration set out in President Cyril Ramaphosa’s state of the nation address.
What is your impression around the key tax announcements?
Given the increases in personal income taxes in previous years major tax instruments have reached their limit in being used to raise revenue sustainably. As a result the minister only had two options to work with – focusing on wealth transfer taxes and Value Added Tax (VAT).