The South African Minister of Finance, Enoch Godongwana, recently presented a budget which provoked mixed reactions among the population. While the South African Revenue Services (Sars) plans to raise an additional R15 billion to balance the budget, the majority of this will come from personal income tax.
This increase in tax pressure on individual taxpayers comes without adjustments to tax brackets, tax rebates and medical credits, while households face significant financial pressures. Minister Godongwana highlighted the need to generate this additional revenue to address immediate fiscal pressures, including managing the national debt of R457.7 billion.
As part of this budget, Sars will also introduce a global minimum corporate tax, guaranteeing a tax rate of at least 15% for multinational companies, regardless of the location of their profits.
Although increasing VAT to 16% was considered, it was ruled out due to its potential impact on income distribution. Instead, the government chose not to adjust personal income tax brackets, viewing this measure as more efficient and equitable.
South African taxpayers will therefore see their taxes increase according to their income, without benefiting from increases in individual tax rebates or medical credits. At the same time, higher taxes will be applied on alcohol, tobacco products, electronic products and plastic bags, as well as environmental taxes such as the carbon tax.
This distribution of tax burdens has provoked diverse reactions within the population, highlighting the delicate balance between the need to collect additional revenue and the concern not to increase economic inequalities. The implementation of these tax measures raises questions about the long-term impact on the South African economy and society.
In conclusion, the budget presented by the Minister of Finance highlights the challenges South Africa faces in terms of financial and tax management, and highlights the complexity of the economic issues facing the country.
—
Do not hesitate to adapt, modify or reformulate this text so that it corresponds to your needs and the direction you wish to give to your article.