BUSINESS DAY SPOTLIGHT
Economic news of the week: President signs finance-related bills into law
Host Mudiwa Gavaza is joined by Keith Engel, CEO of the SA Institute of Tax Professionals
In this edition of Business Day Spotlight, we talk about the state of public finances and taxes as the government grapples to create a budget for the year.
Host Mudiwa Gavaza is joined by Keith Engel, CEO of the SA Institute of Tax Professionals (SAIT).
SAIT is said to be the largest of the professional tax bodies in SA, representing about 8,000 professionals, says Engel.
This week, President Cyril Ramaphosa signed a slate of new finance-related bills into law. The list includes the Rates and Monetary Amounts and Amendment of Revenue Laws Act, the Taxation Laws Amendment Act, and the Tax Administration Laws Amendment Act.
For ordinary South Africans, Engel says the bills signed are nothing new and are simply a ratification of finance minister Tito Mboweni’s budget from 2020.
Engel then turns to the upcoming budget, which he says is incredibly difficult for the government to craft given the ongoing pandemic, loss of jobs and economic activity; as well as reduced tax income for the state. He says the balancing act is made even worse by the fact that the government has to fund the vaccines to get SA to inoculate two-thirds of its population. Unlike other expenditure items, the government has no choice but to find the money to do this. Life in SA cannot return to normal without it.
As a result of these competing factors, Engel says reprioritisation of other types of spending is likely to be a big theme of the upcoming budget. The trend has already been set after the finance ministry had to shift national spending when lockdowns started in 2020.
The discussion also focuses on the state of public finances and the possibility of new rounds of stimulus in SA.
Engel ends off explaining the practicality of increasing taxes as the issue of a wealth tax creeps up again and how South Africans took to tax season in 2020.
For more episodes, click here.
Engage on Twitter at #BDSpotlight
• Business Day Spotlight is a MultimediaLIVE production.
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