Gigaba hints at ‘new path’ for SA in next year’s main budget

THE medium-term budget policy (MTBP) statement does not include any new tax measures, but Finance Minister Malusi Gigaba has not ruled them out for next year.

Gigaba said in a press conference ahead of his budget speech that changes to the tax regime were usually dealt with in the main budget, to be delivered in February.

While he did not want to comment on the possibility of tax changes ahead of processes which had yet to unfold before any new tax measures could be introduced, Gigaba said that the past four budgets had seen fiscal consolidation using both cuts in expenditure and an increase in taxes.

He said in introducing new taxes, he would need to consider what South Africans would be able to stomach.

“It is not fiscal consolidation that South Africa needs. It’s a new path altogether,” he said.

In his MTBP statement, Gigaba stated that “new spending initiatives could only be accommodated through reprioritisation or parallel tax increases”.

However, he pointed out that there was “little space for tax increases in the current environment”.

He said the Health Promotion Levy or so-called “sugar tax” is under consideration in parliament with a proposed start date of April next year.

The national Treasury was also considering new ways of managing tax benefits related to medical aid schemes, which could including scrapping the benefits. — DDC