Budget aims queried

2011-02-24 00:00

WHILE organised business structures in KZN and elsewhere generally welcomed the emphasis on jobs, skills and infrastructure in Finance Minister Pravin Gordhan’s budget speech yesterday, the practical implementation of skills development initiatives and a bloated public service were major points of concern.

The CEO of the Durban Chamber of Commerce and Industry, Andrew Layman, told The Witness that although a great deal of money is spent on education, South Africans have comparatively little to show for it.

He also questioned the wisdom of allocating significant resources and money to the Sector Education and Training Authorities (Setas) and the National Youth Development Agency, which generally “have not inspired confidence”.

Gordhan said the South African Revenue Service (SARS) will streamline the tax process for emerging businesses, adding that this would require the establishment of an accurate picture of all business entities.

He said SARS and other agencies will conduct a door-to-door drive in the informal sector to “help complete the picture”.

Layman said Gordhan’s intention to put in place additional procedures to formalise business could be seen as a negative step.

“I have a feeling that they want to over-formalise business” he said.

“ In a lot of other countries, particularly in Asia, people just go ahead and do business. While one might want to include more people in the tax net, we should, up to a point, leave them alone to operate.”

The CEO of the Pietermaritzburg Chamber of Business, Melanie Veness, told The Witness that Gordhan’s focus on youth, employment and skills development is critical for stimulating economic growth.

Although she welcomed incentives aimed at the manufacturing sector, Veness added, wider incentives for all businesses should have been introduced in order for businesses to create more jobs.

“We are pleased with the adjusted turnover tax for micro businesses and the R20 billion tax incentives for manufacturing investment.

“There is some concern, however, that there weren’t sufficient incentives offered to business to assist government in achieving the objectives laid out in the New Growth Path,” she said.

Veness and Layman expressed concern that the public service wage bill has doubled in a matter of only five years.

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