REVENUE SHORTFALL
Tax hikes and levies set to chafe lower-income families
It is going to be a rough ride for low-income households facing a marginal tax increase, but the argument for an overall increase in personal income taxes is losing favour. While there will be no adjustments to the top four income tax brackets, there will be below-inflation adjustments of 3.1% to the bottom three brackets. Treasury deputy-director general Ismail Momoniat explained that there were only three options: to increase value-added tax (VAT), personal income tax or corporate income tax. While an increase in corporate income tax was unfeasible based on international standards, Momoniat said personal income tax had already been increased dramatically and "is not giving us what it should". Andrew Wellsted, head of tax at Norton Rose Fullbright, said because the country had such a small tax base, every time the Treasury increased taxes, there was more pressure on taxpayers. "South Africans are definitely going to feel more of a pinch going forward," said Wellsted. With fiscal dr...
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