Spotlight on overspending of public funds in budget speech: economist
"New tax reforms" could be announced when the Finance Minister, Pravin Gordhan delivers his budget speech tomorrow.
Dawie Roodt says the spotlight will also be on the overspending of public funds by government officials.
lead to significant tax increases in this budget.
"State finances are in real trouble. The reason for that is that politicians have been spending like there's no tomorrow and the result of all of that is that state debt levels today are at record high levels. The answer to this is to cut state spending. Unfortunately, politically this will be very difficult to do. That leaves the Minister of Finance one option only and that is to increase tax," he said.
ALSO READ: Significant tax increase looming: Roodt
Roodt says it is expected that Gordhan will announce a number of tax increases.
"What can be expected is that the Minister of Finance to make some adjustments to certain taxes. Personal income tax can be adjusted - either directly or indirectly by not adjusting sufficiently for inflation. I don't believe taxes such as value added tax and company tax will be increased. If company taxes are increased, it will make South Africa unattractive as an investment destination," he said.
The economist says taxes on petrol, cigarettes and alcohol may see changes as well.