Faizel Patel – 23/02/2021
The project director for the South African Institute of Chartered Accountants (SAICA) Sumaya Khaki says Finance Minister Tito Mboweni is in a very difficult position as he prepares to deliver his 2021 budget speech.
Khaki was speaking to Radio Islam on Tuesday ahead of Mboweni’s budget at 2pm on Wednesday.
South Africans are waiting with baited breath to see what the finance minister has in store for the country after COVID-19 pushed the economy further on a downwards spiral.
Khaki says Mboweni is not in favourable position.
“If you recall that in the state of the nation address last year, the president mentioned various plans to grow the economy. For example infrastructure development, create employment opportunities for more South Africans. These are some of things that the minister would have to put some firm plans to as to actually they will be rolled out.”
Khaki says while Mboweni is expected to announce and increase in the fuel levy there will also be possible hikes in sin taxes.
“It is an easy target to increase and it’s not just from the perspective of increasing revenue, but also from a health perspective because the diseases that has given rise to by high sugar consumption, high alcohol use and smoking. That also puts a burden on the health system.”
Khaki says while it is very unlikely that Mboweni would increase the VAT rate, it is one of the easiest ways to increase the country’s revenue collection and effected immediately.
Listen to the interview with Sumaya Khaki