In the upcoming budget speech on February 26, tax increases of more than R25 billion can be expected. This could be in the form of increases in VAT and personal income tax
With our economic growth outlook at a paltry 0.5% and load shedding the new normal, tax increases are a given
Increases might be frozen, bonuses scrapped and pay progression to higher salary levels could be limited. This is less than the R150 billion that was mentioned in the medium-term budget policy framework in October, but it would be a start, said Schultz. During a budget preview presentation in Johannesburg last week, PwC said the budget deficit for 2019/20 was estimated at 6.3% – the highest since 1992.
Schultz said the state’s onerous salary obligations were diverting money away from other social obligations and necessities. It is estimated that Phase 2 load shedding costs the economy R1 billion a day. With Phase 4 load shedding, losses shoot up to R1.9 billion a day.
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