Tax relief for low-income earners

2010-02-17 12:23

CASH-STRAPPED South African taxpayers received a R6.5 billion tax

relief from Finance Minister Pravin Gordhan when he tabled a R907 billion budget

for the fiscal year 2010/11 in Parliament today.

“Income tax relief for individuals will amount to R6.5 billion,

which largely compensates for the effects of inflation. Most of the relief is

provided to taxpayers in lower-income brackets,” he said.

Gordhan, who was presenting his maiden budget, said spending would

accelerate to R2.9 trillion over the next three years.

He conceded that government coffers were under strain due to weak

tax revenues. He said the deterioration in the South African economy would lead

to the government collecting R69 billion less this year than was originally

budgeted. Consolidated revenue would total R658 billion in 2009/10, R32 billion

less than in the last fiscal year.

“We will continue to face revenue challenges in 2010/11 as tax

revenue growth is likely to lag the recovery. Given the gap between spending and

revenue, alongside efforts to curb spending growth, government requires more tax

revenue.

“The preferred method of achieving higher revenues is through base

broadening, closing loopholes and improving tax compliance,” Gordhan said, who

expects the economy to grow by 2.3% this year.

National Treasury expects the budget deficit to reach 7.3%, as a

percentage of the gross domestic product (GDP) this fiscal year. Gordhan said

government would borrow from the domestic and international markets to finance

the shortfall. Overall government debt was expected to rise to 40% of the GDP in

2013 from 23% to the GDP in 2009.

Gordhan said the government would not raise taxes to cushion

households from the vagaries of the recession, which has put them under

financial stress.

In what would come as a blow to labour federation Cosatu, Gordhan

said the controversial consumer inflation target of 3% to 6% would not be

changed. Cosatu and its leftist ally, the SA Communist Party, have been

clamouring for the target to be pushed higher or to be scrapped altogether. They

argue that this policy leads to higher interest rates than is necessary and

worsens poverty and unemployment.


Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.