Unqualified to make claims about Transnet

THE article titled “Fiscal battle between extremes”, The Mercury, February 22, by Professor Patrick Bond has reference.

Bond makes sweeping, misleading and unsubstantiated claims about Transnet’s capital investment programme and how it is funded.

This deliberate obfuscation is designed to mislead the readers of The Mercury into believing that Transnet is not self-sustainable.

He claims that Transnet is one of several state-owned companies

Wealthy should not be taxed too much

I AM not surprised by the rise in the top marginal income tax rate to 45%, given the R28 billion revenue gap Finance Minister Pravin Gordhan needed to plug.

As a form of wealth tax, it’s more politically acceptable than a VAT increase. Like the National Minimum Wage, it also has a redistributive effect that could help reduce inequality. That said, given that high-income earners in South Africa already carry a heavy tax burden, the government should perhaps be cautious about adding too much more to it in the next Budget speech. There is a balance to be struck between collecting a fair share from the wealthy and taxing them so heavily that tax avoidance or moving overseas become attractive options to them.

On the increase in dividends tax, the increase in withholding tax on dividends from 15% to 20% is significant since it will raise a further R6.8bn for the fiscus.

While it’s a relatively equitable tax increase in an environment with little room for manoeuvre, it could affect pensioners who depend on income from dividends as well as discourage savers. Also noteworthy is a change to the law that includes three categories of dividends in remuneration from March 1. These dividends can potentially be taxed at 45% – it was 41% before.

ROB COOPER Tax expert and director of

legislation at Sage

Average consumer bears tax burden

THE 2017 Budget speech marks the highest marginal tax rate since 1994.

Tax increases announced by the finance minister will not only have a significant impact on South Africa’s top earners, but also on the average consumer owing to limited relief for bracket creep.

The increase of income tax to 45% on individuals earning more than R1.5 million a year, will affect around 100000 income earners which is expected to bring in an additional R4.4 billion in revenue. It is worth noting that the top 6.6% of registered taxpayers will now be contributing about 50% of the country’s total personal income tax revenue.

Average taxpayers will also need to tighten their belts once again, following this Budget speech, as the Treasury will also be taking advantage of the effect known as tax-bracket creep. The Treasury usually adjusts the existing tax brackets each year to keep individuals who earn inflation-related salary increases within the same brackets.

However, this year the Treasury only adjusted the tax bracket by 1%, while average salary increases will still be in line with inflation at around 5%. This means that many income earners may find themselves in a higher income tax bracket.There is no relief being offered for inflation, and we will see a 39c-alitre increase in fuel taxes, various increases in sin taxes and the sugar tax. The overall message is that the average consumer will end up bearing quite a burden. MIKE TEUCHERT

Mazars Tax

Budget a let down in reform of SOEs

RADICAL economic transformation, inclusive growth and equality were important features of Minister Pravin Gordhan’s National Budget speech on Wednesday. Its tone was very redistributive and echoed the President’s State of the Nation address.

It therefore came as no surprise that the minister side-stepped the controversial issue of a VAT increase and opted to look to high income earners to help raise an additional R28 billion.

In terms of progressive tax system, it makes sense to have those who earn more, pay more. But there are concerns there could still be risk to growth from the second-round effects of increased taxes.

Revenue lagged behind the economy, which led to a R30bn shortfall by comparison with the budget estimate a year ago. The impact of a weak economic environment resulted in the shortfall experienced mainly in personal income tax, VAT and customs duties. whose borrowings are guaranteed by the National Treasury.

For the record, Transnet has been successfully raising funding through domestic and international debt capital markets on the strength of its financial position with no government guarantees since 2005. More than 95% of our debt is without government guarantees.

This points to its solid financial position, management’s track record of executing its capital investment strategy and the attractiveness

Global growth prospects are looking better, which means that South Africa should benefit from the overall improved outlook. However, the 1.3% domestic growth expectation is still dependent on the implementation of reforms and barring any negative developments on the political front.

From a revenue generation perspective, the usual suspects were targeted, being sin taxes and an increase in the fuel levy. Sugar tax does seem to be an eventuality, but details still need to be finalised; meanwhile implementation of the proposed carbon tax has been kicked further down the road.

From ratings agencies perspectives, there were some positives and negatives.

The minister stayed on the fiscal consolidation course, as the pace of consolidation was unchanged. But the Budget did disappoint on the reform agenda, especially regarding state-owned entities.

TUMISHO GRATER Novare’s Economic Strategist

Weak growth strains everything else

THE Budget speech to Parliament by Finance Minister Pravin Gordhan was generally a realistic, balanced and predictable analysis of the socio-economic challenges in general, and the fiscal difficulties in particular, faced by South Africa.

Apart from promoting inclusive growth, the 2017/18 Budget has also had to seek to close the fiscal “gap” of about R28 billion still remaining in the country’s public finances.

This has been done mainly through the widely anticipated increases in taxation at selected levels, embodying a tough message about the economy.

The basic test of the Budget decisions will be their net impact on business and consumer confidence. MEDIA reports like “Moore leads resistance against Trump” tend to cast doubt on the popularity and validity on American election results. The mainstream media in America have made no secret of the fact that they despise Trump and will do anything to discredit his presidency.

The same suspect poll companies that predicted a “landslide” victory for Hillary Clinton are now advocating that his public approval rating is the lowest in American presidential history. Why should they be believed?

The question needs to be asked: If Trump is so unpopular and offensive, of our portfolio of projects.

We wish to highlight that we have a stand-alone credit profile and investment grade credit rating. This confirms that the markets view us as a credible and reliable borrower with strong credit fundamentals.

We are baffled by Bond’s claim that our capital investment programme is “self-destructive”. He seems to have forgotten that before Transnet undertook the capital investment programme, which is aimed at strengthening the logistics The overall emphasis in the Budget speech on improving growth prospects must be endorsed, as must the minister of finance’s insistence on enlarging the role of public-private sector collaboration in further unlocking SA’s growth potential.

Yet even if the optimistic growth forecasts in the Budget are accepted, it remains clear that current weak growth strains everything else, including “radical economic transformation”. The finance minister rightly insists that it is imperative that SA breaks out of its “low growth trap”.

The Budget nonetheless appears to have been more successful in balancing the state’s books than in immediately boosting inclusive growth, as many of the drivers of growth lie outside the control of the National Treasury.

Translating fiscal resources into tangible outcomes still requires urgent and efficient implementation by the public sector as a whole, as well as ensuring that state funds are effectively spent.

What SA therefore needs to avoid is drifting into a negative “tax-andspend” cycle, which will ultimately weaken economic performance. The imbalance here is that about two-thirds of the current “fiscal consolidation” appears to be coming from tax measures, whereas approximately only one-third stems from spending ceilings and other fiscal disciplines.

The danger exists that aggressive taxation may then eventually defeat its own ends by diminishing the future income to be taxed, unless renewed growth boosts tax revenues. SA probably needs at least about a 2% to 3% growth rate to limit the future tax burden.

The decisive message nonetheless to be taken from the 2017/18 Budget is that, despite recent political pressures, SA’s fiscal policy remains highly predictable and in safe and responsible hands. how did he manage to beat the ever so “beloved” Hillary Clinton? The fact is that Trump captured 220 counties which were won by Obama in 2012, a clear indication that many Americans were not happy with Obama’s performance. Why?

The American public are sick and tired of the lies, deception and false promises of their politicians and, believe it or not, this includes Obama. Trump has demonstrated, in his first month in office, his full intention of keeping his campaign promises while the media and Democrats are going all out to ensure that he fails.

This in itself is disgusting and competitiveness of the country, there were frequent cries that Transnet was impeding economic growth. Now that we are responsive to validated demand, he finds it absurd.

Over the past five years, we have invested R133 billion on key projects in the freight system across our rail, port and pipeline networks. More importantly, our investment programme has had a significant contribution in reducing the supplydemand gap, particularly for our

The Treasury continues to display a strong commitment to financial probity in SA’s public finances. These reassurances remain essential to the maintenance of confidence in good governance in SA. The risks and uncertainties around the expected cabinet reshuffle are highly relevant to the future role of the Treasury as a trusted custodian of taxpayers’ funds.

RAYMOND PARSONS Economist, North West University school of business and governance

South Sudan needs all of our help now

MORE than three years of war have left nearly five million hungry in what aid groups called a “manmade” tragedy.

At a glance, the conflict would seem to be a war between the two biggest ethnic groups in South Sudan. But the civil war has its roots in a conflict that began decades ago and touches on control of land and natural resources, including a vast oil wealth.

South Sudan is a new country and one of Africa’s biggest oil producers. There is little evidence that oil revenue is reaching those who need it most and the industry is shrouded in secrecy.

Oil is also a key driver of the conflict – a key strategic target for the rebels.

Battles to control oilfields have displaced communities and destroyed existing infrastructure.

Famine in South Sudan has left 100 000 people on the verge of starvation and almost five million, nearly 40% of the country’s population, in need of urgent help. People are already dying of hunger, and another million people are on the brink.

The people of South Sudan need to have their own voices heard directly in the next peace process, so they can find ways to bend that disloyal to the will of the American people who have democratically elected Donald Trump as their president.

Trump’s accusation of false news is not unfounded. In spite of charges by the FBI, the CIA and the media of Russian interference in the elections, they are unable to produce any kind of proof whatsoever from their so-called “undisclosed” sources.

Branding Trump a racist because he wants to keep “illegal” immigrants and drug cartels from entering the US via Mexico is further proof of the media’s biased agenda.

Trump is the American president. captive markets. This is effective and beneficial, and what customers and the country desperately need.

The monomaniacal attitude by public commentators who have no understanding that strengthening the supply chain is a competitive tool and a prerequisite for economic growth is testament to the dearth of knowledge on how to catalyse and stimulate growth in a rapidly uncertain world.

MOLATWANE LIKHETHE Spokesperson, Transnet SOC Ltd curve towards peace. Bodies like the AU and the Intergovernmental Authority for Development must take more robust action to back a ceasefire and hold all parties accountable.

South Sudan needs all of our help and attention now and in the months to come, if it is to realise its bright future. SHAISTA MIA Morningside

Truth must prevail in IFP succession race

IT IS DISTURBING to witness factless and baseless reports and information stating that Reverend Musa Zondi and Thulasizwe Buthelezi are tipped for the presidential position as successors to IFP president Inkosi Mangosuthu Buthelezi.

Both individuals have distanced themselves from this matter. Zondi stated that, “Since 2011, I am not in the party structures and that makes me not to know about developments”.

Thulasizwe Buthelezi echoed Zondi’s sentiments but stated: “According to my knowledge, Shenge is still at the helm.”

These statements defuse any speculations that are misleading and confusing people on the ground.

It’s the IFP conference that will have the final word on the affairs of the party, as it does on its burning issues and any other political decisions. It is therefore unfortunate that there are people who are on a mission to sow divisions in the party by spreading information that is baseless and misleading, with far-reaching implications.

Their mission is to confuse and mislead Inkatha members and keep the party divided. Everyone is entitled to freedom of speech, but that right should not be over-stretched and misused as propaganda. NONTOKOZO SELEPE

Pimville You can like him, you can hate him, but like all presidents before him he deserves an opportunity to prove what he can or cannot do, without false reporting.

I have done extensive research on the Net and the accusations of bigotry, sexism, xenophobia, sexual harassment, etc, are all rather suspect. The latest polls in America show that close on 70% of people in America do not trust the media.

Michael Moore is fast losing popularity and he is desperately trying to keep floating. My money is certainly not on him. S LOUW Ballito