EL company offers five tips for Tito

When Trevor Manuel was minister of finance, he invited citizens to give him their tips for his budget speech.

Current finance boss Tito Mboweni has yet to extend the invitation, but NFB has invited itself.

Andrew Duvenage, managing director of NFB Private Wealth Management, a wholly-owned subsidiary of NVest, East London’s only JSE-listed company, has sent Mboweni five tips to keep cash flowing in 2019, without in the process disincentivising the 2% of people who pay up to 35% of the taxes.

● Reinvigorate tax incentives for corporates, shifting taxation away from individuals. Provide incentives to businesses that grow the economy.

Create broad-based growth incentives, unlocking cash on balance sheets.

Extend incentives to foreigners prepared to invest locally.

● The flat 28% corporate tax rate, introduced in 2013, did not encourage investment. Slash it for a given period, as long as the savings go to job creation or fixed capital expenditure.

● Reduce the government wage bill. SA spends 14% of GDP on state employees, some 36% of the annual budget. Reduce it to 30%, by limiting increases to match inflation, without compromising the health and education sectors. Use the savings to create jobs and fund entrepreneurs in high-growth sectors.

● Change the restrictions, set out in regulation 28 of the Pension Funds Act, on offshore investing. The 5% increase in 2018 to 30% was a positive step.

However, pre-retirement constraints hinder the potential to bolster savings over a person’s working life.

This has serious consequences for people and jeopardises future financial security.

● There is a paucity of financial education at school level.

Redirect some of the education budget specifically to subjects such as personal budgets, retirement and goal-oriented saving, to build an understanding of money and saving.