South Africans, brace yourselves.

Current finance minister Malusi Gigaba is expected to give his ‘mini-budget’ in October, and it has become clear that “National Treasury is in a very difficult position,” suggests BusinessTech.

In his budget speech in February, Gordhan said the National Treasury had to draw in an extra R28 billion in tax revenue over the next two years.

It gets worse, though, fund manager Wayne McCurrie says that now “South Africans should expect tax increases soon, as the government needs to fill an additional R40 billion to R50 billion tax hole”:

This is a significant amount over and above the extra taxation needed to fill the gap as announced by former finance minister Pravin Gordhan in February 2017, McCurrie said, and will likely negate any relief seen by lower interest rates.

Analysts said this “would most likely be achieved through a fuel levy increase, shifting tax brackets, capital gains and sins taxes, or even an increase in VAT if needs be”.

It’s just take, take, take, isn’t it?

Speaking on Monday, Treasury tax analyst Chris Axelson said that the group faced a dilemma in looking for revenue:

Cutting spending (like government’s wage bill for example) would put growth and tax revenues under pressure – but if taxes keep getting hiked, people would look for loopholes and other tax evasion techniques, leading to the same result.

Lawmakers are either left to leave the tax deficit deteriorate, or to change big tax items like income tax, corporate tax, VAT, or the fuel levy, Axelson said.

Gigaba and other speakers at the indaba all “alluded to the fact that tax compliance in South Africa was already slipping”:

The minister conceded that tax collection problems were directly related to corruption and wasteful expenditure, but appealed to businesses and wealthy individuals to also pay their fair share, and not use “options available to them” to avoid paying tax.

I rate if they started putting our tax money to better use, they might just receive a more dedicated tax revenue.

Whatever your tax issue, speak to Galbraith | Rushby. Local tax practitioners located in Woodstock, they offer “professional tax compliance and advisory services to individuals and business”.

Today tax efficiency and compliance are critical factors which affect everyone, and Galbraith | Rushby ensure that your business remains up to date with the constant changes in legislation, tax court cases and SARS policy.

So, come October, at least you’ll have the pros on your side when the next tax bombshell is dropped.

[source:businesstech]