Tax experts spell out Pravin Gordhan’s options for plugging budget shortfall
Finding R28bn to plug a revenue shortfall in the national budget will not be easy
Finance Minister Pravin Gordhan is expected to be scraping the bottom of the barrel to plug a R28bn revenue shortfall when he presents the budget next month. Nazrien Kader, head of taxation services at Deloitte Africa, said on Tuesday there were at least 11 categories the Treasury could tap for extra revenue. One option was a surcharge tax on wealthy individuals and all companies Another was raising the marginal tax rate for individuals from the current 41%, which could yield a further R3.5bn. The rate was 45% in the late eighties. "It is also conceivable that a special levy or surcharge may be applied to individuals with earnings above a set threshold," Kader said. She said this could also apply to companies based on turnover generated – where profits were nonexistent. Kader said there was "little scope to increase the proportion of capital gains subject to tax". This already stood at 40% for individuals and 80% for companies and trusts — higher than the Africa average for individu...
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