CRA Personal Finance – South Africa
By Samantha Riddle
– President Cyril Ramaphosa was serious when he said that economic recovery from Covid-19 would be led by citizens
– An advisory panel appointed by the President has urged Ramaphosa to find a way to find more income for Treasury
– One of the possible methods the government is exploring doing this is to introduce new taxes
President Cyril Ramaphosa’s advisory panel encouraged him to find new ways to generate more income for Treasury.
This comes after the Covid-19 pandemic saw state coffers taking an immense knock and one of the government’s responses may well be the introduction of ‘new taxes’.
Already-existing levies may also be increased when the Covid-19 Recovery Plan for the economy is announced later this week.
Bloomberg reports that the taxpayer is most likely set to be the easiest target despite disposable income already being minimal, but the government has little in the way of alternative options.
Economists warn that SA cannot afford to pay out R350 grant forever “We risk having nurses, doctors being unable to provide health services because of medicine stock-outs. Teachers paid but with no learning materials or classrooms. Cops grounded in stations because there is not enough petrol to go on patrol.”
The report pointed out that this ‘undermines the progressive realisation of socio-economic rights to basic services’ and will reduce already-flagging social spending.
The South African reports that the advisory group has identified four ways in which taxation could be introduced or increased:
- Solidarity Tax
This tax would look to reclaim more funding from the nation’s richest citizens.
2. Basic Income Grant
This would replace the social grant, expected to cost around R240 billion annually. and would need to lean on taxes for funding.
3. Fuel hike on the cards
The usual suspect when it comes to tax increases the fuel levy may well be targeted.
4. Estate taxes
The taxes paid on the ‘dutiable estate’ of a deceased citizen are set to also take a knock.
Earlier, Briefly.co.za reported that discussing the economic health of the nation Ramaphosa said there are precious little fiscal resources to spread around.
Fundraising and contributions from the private sector were all mentioned as possible solutions: “Government has to a large extent run out of money and we are going to have to cobble the money together. Fortunately, some aspects of this recovery plan will be funded through a variety of mechanisms, with the private sector playing a key role.
Government will play a key role.” Acknowledging frustration with the pace of reform and policy implementation, Ramaphosa said that: “I know that the level of confidence of many people is pretty low because we have delayed in an inordinate manner. But we are facing a new area – implementation after implantation.”
Irrespective of the plan at the end of the day the President stressed that all South Africans must be united in their determination to see it succeed: “In the end, it is our plan and all of us will have a role to play. We are seeking to galvanise the entire nation together. We also need to be able to make everyone realise that it is important that if we want to achieve these ideals that we need to work together.”
Article Credit To Briefly.
