Fin24 users speak: Mr Minister, don't raise taxes - cut costs!
FIN24 / 20 FEBRUARY 2018 - 17.55 / EUGENIE DU PREEZ
Cape Town - It was Trevor Manuel with his popular 'tips for Trevor' who started the tradition of requesting the public to send their budget suggestions to the finance minister. Subsequent ministers followed suit, and today it has become a useful way for Treasury to find out ordinary people's hopes and fears in the run-up to the official budget address.
Whoever delivers the first budget of the Ramaphosa era faces a daunting task, with a R50.8bn hole in the nation’s finances that needs to be plugged.
Image - Fin24
With tax hikes a strong probability, the subject is understandably top of mind for many Fin24 users.
Fin24 user Shaheel Garach proposes, among others that National Treasury:
Increase the fuel levy (a stronger rand should hopefully decrease the price of fuel, therefore an increased levy should result in fuel prices staying the same);
Set up a task team in SARS to increase registration and tax collection of taxi owners;
Scrap medical aid allowances for all earners above R500 000;
Increase VAT by 1%
An anonymous user writes: "Take personal tax away and up VAT to 20%. The more net pay you have, the more you will spend which is in turn good for the economy."
Tammy Henry makes a heartfelt plea: "Please cut individual tax.. Honestly, this will help us.. Take it back to 11 percent..This will help South Africa."
Micheal Schirnig writes: "Instead of raising taxes, how about cutting costs? The best budgeters out there – housewives – will tell you that you mustn’t buy what you can’t afford, and you need to scrimp & save around every corner. Not easy, but very effective."
Capital gains tax is on Leon Pelser's mind. He suggests: "As the percentage of capital gains increases annually, and presumably this year will be no different, the calculation of the capital gain needs to take into account the effect of inflation, otherwise there is no incentive for long-term investment."
Smapalle's request is succinct: "Increase company tax."
Etienne Rubbers has a threefold suggestion:
"1. Enlarge the VAT exempt basket, and increase VAT;
2. No funds for free education, as it is financially not viable at this stage;
3. Simplify regulation for tax, company regulations, BEE requirements."
Ashley - M brings up the topic of dividends withholding tax which, he says, is "increasing to a very high percentage".
He continues: "As you know, many BEE shareholders own shares and the little payout they receive Treasury wants to eat up, thereby preventing wealth growth to black people. I believe a threshold needs to be introduced for BEE shareholders and a cap be put in place.
"Some relief must be created for black people to accumulate wealth."
He feels that radical economic transformation is the answer: "The people who own thousands of shares in companies should be taxed at a higher rate, effectively taxing the very rich. It saddens me when a black government makes rules to disadvantage black people.
"Apartheid provided too much of an advantage for white people and we need radical economic transformation to address the imbalance of the past."
Minnaar Pieters has some concrete suggestions:
"Here are my recommendations for your latest Budget Speech:
'Raise the minimum contribution for tax free accounts to R40 000 per year. We should embrace a savings culture in SA, and every little bit of incentive helps.
"Instead of increasing taxes on a dwindling few, bump VAT to 15%. This way everyone contributes more.
"Give tax incentives to businesses and homes that embrace solar electricity.
"Give tax incentives/decrease import taxes on electric/plug in vehicles. This has the potential to become a major income source for Eskom in the future. Electricity usage is down (and will continue to go down), and Eskom needs new ways of making money."
Roderick Ferreira has the last word: "Hi Mr Gigaba, how about reducing water and rates charges for pensioners?"
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER