PRESIDENT Jacob Zuma should have given more detail on the intent behind the government’s move to commission a study into tax policies, including those in mining, later this year, South African Chamber of Commerce and Industry (Sacci) CEO Neren Rau said on Friday.
Mr Zuma wants the study — to be commissioned by Finance Minister Pravin Gordhan — in order to assess whether the various sectors of the economy are contributing as they should to state revenue.
Concern is rising in business quarters that Mr Zuma’s comments only create further policy uncertainty, as opposed to making policy clearer.
Mr Rau said a possible consequence of the proposed study could be a greater tax burden on the existing tax base, "whereas the emphasis should be on expanding the tax base".
Citigroup economist Gina Schoeman believed the study could be a prelude to possible tax increases, whether income or corporate, in this year’s October medium-term budget policy statement or the February 2014 national budget statement. "We believe the latter is more likely," she said.
Efficient Group chief economist Dawie Roodt said while it was the opening of Parliament and "too much detail could not be expected", he also supported the view that tax increases might be on the cards — perhaps sooner than expected.
"He (Mr Zuma) needs more money for his grand ideas. Taxes are going to go up. Maybe even in this budget," Mr Roodt said.
Mr Gordhan will deliver the budget later this month.
Sacci said it would also have liked to see more on programmes for supporting small business in Mr Zuma’s speech, but welcomed the enforcement that businesses supplying services to government had to be paid within 30 days.
The business organisation said it remained concerned about the restoration of both domestic and international business confidence in the country.
Regarding Mr Zuma’s call on business to absorb 11,000 graduates from further education and training (FET) colleges, Mr Rau said the private sector would need "support" from government to do this.
Mr Rau suggested updates on the delivery of commitments made in the speech be reported on at least annually to keep track of progress and implementation.
More in this section
- Amcu leader says union will ‘bring economy to standstill’
- Tax act could be subject to litigation, says Davis
- Call to align utility prices with nation’s growth objectives
- Courts reel in SARS ‘fishing expeditions’ against taxpayers
- Slump in SA retail sales growth fans fears that household spending will slow
- South African retail sales rise in March