We encourage all employers, employees and payroll departments to prepare for an income tax increase that will likely be announced during Finance Minister Pravin Gordhan’s upcoming National Budget Speech. Too much tax South Africans already contribute multiple taxes. Therefore, the government is faced with a difficult decision — how to bring in much-needed revenues to run the country effectively without overburdening the man or woman in the street. In tax theory, there is a level at which taxation can become so high that the average person stops aspiring to a better lifestyle and becomes less economically active. At this point, working any harder seems fruitless. In light of this, the government strives to meet its budgetary requirements without crossing that threshold. However, if people are still left with less disposable income, this can lead to a lower aggregate demand for goods, which puts deflationary pressure on the economy. The result is loss of business profits, lower output...
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