Budget in a nutshell: tax hikes hit South Africans’ pockets hard
South Africans earning more than R1.5m a year will pay an extra R4.4bn to the fiscus
Finance Minister Pravin Gordhan has announced hard-hitting increases in personal income tax of R16.5bn for 2017-18, as economic growth stutters and revenue collection falls short of expectations. These increases are part of a total R28bn package of tax hikes. Tax revenue has deteriorated by a further R7bn since the medium-term budget policy statement in October and is now forecast to be R30.4bn lower than the 2016-17 budget estimate, indicating a deterioration in economic growth and tax buoyancy. This is the largest underperformance since the 2009 recession and Gordhan told journalists at a media briefing ahead of his budget speech in the National Assembly on Wednesday that he was concerned about the state of revenue collection in the country and had been engaging with senior management of the South African Revenue Service (SARS) about this. In his speech the minister warned SA was “at a crossroads” and “tough choices” had had to be made. Treasury officials warn there are “significa...
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