Greece did it, the UK did it and circumstances may force South Africa to do it: Finance Minister Malusi Gigaba may have to present an austerity budget for 2018 in parliament this week. With a budget deficit - the difference between public spending and revenue collection - expected to rise to 4.5%, this year's budget is likely to be a "show stopper" and a "watershed year" for tax hikes, and continued cost reduction will be vital, says Nazrien Kader, Deloitte's managing partner for Africa tax and legal services. Tax hikes are mainly expected to affect middle- and high-income taxpayers even though analysts say room to push personal income tax further is now constrained. An increase in VAT is expected for the first time in more than a decade as a result of such constraints.1.4% The Reserve Bank’s forecast for economic growth in South Africa this yearKader said that over the past years the Treasury had repeatedly emphasised the need for austerity measures amid sluggish economic growth, n...
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