‘Cut in government spending would have been better than these tax hikes’


‘Cut in government spending would have been better than these tax hikes’

TMG Digital | 2017-02-22 16:21:54.0

David Maynier of the DA

Image by: Trevor Samson

A bloated public service and failed strategy to grow the economy are to blame for South Africans now facing increases in tax.

This is according to David Maynier‚ the Democratic Alliance Shadow Minister of Finance.

Commenting on Finance Minister Pravin Gordhan’s #2017Budget‚ he said the minister had very little political space and even less fiscal space in which to manoeuvre when he tabled the main budget today in Parliament.

“The fact is that‚ because of a failure to implement structural reforms to boost economic growth‚ economic growth has stagnated‚ with the projected economic growth rate being revised down from 1.7% to 1.3% for 2017.

“That is why the minister was forced to announce tax increases and will be reaching into your pockets to raise an additional R28 billion in revenue in 2017/18‚ including: Personal Income Tax (R16.5 billion); Dividends Tax (R6.8 billion); General Fuel Levy (R3.2 billion); and ‘Sin Taxes’ (R1.9 billion).

“And that is why whether you are rich‚ and paying more direct tax‚ or whether you are poor‚ and paying more indirect tax‚ you will be paying more tax in 2017/18.”

He said there are alternatives to tax increases – including boosting economic growth‚ selling assets‚ cutting spending and eliminating waste.

“What we should be doing is cutting spending rather than raising taxes‚ including cutting spending on‚ for example‚ the R14.3 billion that will be wasted on bloated executives and legislatures in South Africa.”

Maynier said the party proposed implementing a Comprehensive Spending Review which would require National Treasury‚ working together with national departments‚ provinces‚ municipalities and state-owned entities‚ to review the composition of spending‚ the efficiency of spending‚ and future spending priorities‚ with a view to reprioritizing expenditure between 2017/18 and 2019/20.

“The need for a Comprehensive Spending Review is underlined by the fact that‚ despite the tax increases‚ there will still be spending cuts‚ which will compromise service delivery‚ including R2 billion reduction in conditional grants… We have to reprioritize expenditure to fund programmes to provide opportunities for the ‘lost generation’‚ which includes millions of young people who do not have jobs‚ or have given up looking for jobs‚ in South Africa.”

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