The tax increases in the pipeline in the next two years would undoubtedly be painful and would hurt growth but the alternative was far worse, Treasury director-general Lungisa Fuzile said in Parliament on Thursday. Tax increases of R28bn in 2017 and of R15bn in 2018 will be necessary for the Treasury to pursue its fiscal consolidation objectives. Fuzile said in a briefing on the medium-term budget policy statement to Parliament’s two finance committees that raising personal income tax would lower the disposable income of households, while an increase in value-added tax (VAT) would mean prices would rise and people would be able to afford less. "However, the central point that we make is that notwithstanding those likely risks of the impact on growth, there can be a much more painful risk if we were to fail to act to achieve fiscal consolidation because a lot of what would arise out of that would have much more negative consequences," Fuzile said. He emphasised in an interview that i...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.