Mboweni to break tax camel’s back

For a man who is bound to have annoyed most South Africans yesterday and is tasked with arresting the country’s steady downward economic spiral, Finance Minister Tito Mboweni was in a surprisingly jovial mood delivering his medium-term budget policy statement in parliament.

However, his actual remarks, summing up the dire situation the country finds itself in (largely thanks to his own government, it must be said), were depressing.

If government and the citizens of the country don’t make “sacrifices” – and make them now – South Africa risks falling into a permanent debt trap, which will kill future growth and make unemployment even worse.

One sacrifice which Mboweni clearly believes people should make is for Gauteng motorists to pay e-tolls. This is in line with the “user pays” principle, he said … even though there are millions of users of government services and facilities who do not pay.

It also ignores the reality that there are far more efficient ways to raise cash to pay for roads – and even a Gauteng-only fuel levy would be better than tolls and more acceptable to motorists.

Although he pointed to the bloated and top-heavy civil service as a huge eater of funds, Mboweni made few concrete suggestions about reducing it, other than that he looks forward to “robust discussions in the relevant bargaining structures”.

Downsizing government is an ideological bridge too far for many in the ANC, which is not only nostalgic for socialism, but has also built itself around patronage and jobs for pals.

Ominously, the sacrifices for ordinary folk are not limited to e-tolls. Mboweni said “additional revenue measures will be needed”… so stand by for tax increases.

Mboweni and the ANC are clearly looking to load more onto the already overburdened taxpayer camel. It will only take a straw to break its back, though …