No easy fix for Tito's first budget
Minister has limited options amid low growth and elections due on May 8
A wealth tax, an increase in personal income tax and hikes in corporate tax . none of these are considered options for Tito Mboweni, who presents his first budget as finance minister on February 20. Adding to the challenging environment are the May 8 general elections and that the government may try to appease rather than alienate voters ahead of the polls. At most the National Treasury is expected to boost the collection of personal income tax - without announcing a tax increase - through the effect of bracket creep. This is when inflation pushes pay packets into higher tax brackets and the government does not fully adjust tax brackets to compensate. Economists say allowing for bracket creep can add an additional R10bn-R13bn in personal income-tax collection, which is one of the four largest tax mechanisms for the government. A further VAT increase, following a one-percentage-point hike to 15% in April last year, is unlikely, even though SA's VAT rate remains low on a global compar...
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