The SAIT's comments on the Budget Speech 2014
12 March 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
The SAIT welcomed various
proposals contained in Minister Pravin Gordhan’s ‘election budget’ for the 2014
fiscal year. The SAIT would however have liked to see more reforms to the small
business sector, mechanisms to increase foreign direct investment including action
plans against labour unrest as well as mechanisms to increase ‘real’ jobs,
which can only be created through sustainable economic growth.
In 2013, the total tax increased by 11 per cent while nominal GDP is up
only 9,7 per cent, thus the real tax burden increases. Personal tax relief provided
in the budget equals 2,3 per cent while inflation is 5,6 per cent and wage
increases are over 7 per cent.The SA government provides 16,1
million welfare grants while South Africa has
less than 5 million actual personal income tax payers. This is clearly
not sustainable and alternatives to increase the tax base need to be considered
by the government.
For the small business sector, the minister
must have as his/her main objective assisting and growing the number of South
African small businesses. The
SAIT would have liked to see the turnover level of SBC’s increased to R 50
million in order to align it with the proposed changes to the DTI’s BBBEE
categories of exempted micro enterprises and qualifying small businesses. A ministry
for small business and the appointment of a Minister of Small Business, as is
done in Australia and the UK for instance, are also called upon. The SAIT also called for an increased VAT
registration threshold and to remove the red tape coupled with VAT registrations.
company regime contained in section 9I of the Income Tax Act is also not enough
to encourage foreign direct investment into South Africa. The SAIT would like
to see a reduction in the corporate tax rate coupled with an increase in the
VAT rate, subject to more exemptions and zero-ratings to combat the regressive
effects of VAT.
Please click here to access the SAIT's submission on the Budget Speech 2014.