South Africa’s national budget day is currently scheduled for 21 February, according to National Treasury, which added that the date still needed final confirmations. This year’s event will be closely watched, with Finance Minister Enoch Godongwana having said during the medium-term budget presentation in November that significant cost-cutting measures will be undertaken within the government and that the fiscus needed to recoup about R15-billion in taxes. Promises by various finance ministers in the past to curb government’s spending haven’t amounted to much and analysts have questioned whether or not the state has the stomach for austerity measures, especially in an election year. The need to raise an extra R15-billion has also been a topic for debate for the past three months, with consumers concerned that the likes of value-added tax could be increased. Economists have, however, said the amount isn’t inordinate and that it could be achieved in a variety of ways, including not adjusting tax brackets so as to allow for bracket creep. What this means is that if there’s no intervention by the state, inflation and pay increases will push some consumers into higher tax brackets, resulting in larger revenues flowing into the fiscus.
