BUDGET ANALYSIS: Amid the tax pain, a political masterstroke by Gordhan
Finance minister’s budget draws broad approval
Finance minister Pravin Gordhan will surely have done enough to appease the ratings agencies for a few more months at least, having delivered a budget that sucked more out the country’s workforce without appearing to break anyone. Economically, it was solid — if often unpalatable. For example, Gordhan found a way to raise another R28bn in ever-more creative ways — principally, through the introduction of an entirely new tax bracket for those earning more than R1.5m/year. There are only 103,000 South Africans in this category, but they’ll now have to pay 45% tax, an increase from the 41% that applies to anyone earning more than R700,000/year. But, then, Gordhan had to think creatively: the SA Revenue Service’s (Sars) tax collection was an immense R30.4bn lower than estimated. Sars’ problems are partly because of anaemic growth, but also because of chaos inside the revenue service itself — it is racked by infighting, with Sars commissioner Tom Moyane at war with his own boss, Gordhan....
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