Nene’s Gift to Investors

2015-02-26 09:22

Johannesburg --Sunburst Africa--Investors sat on their hands awaiting the Minister of Finance’s budget speech at 2:00pm yesterday. Indeed he entered parliament like Father Christmas giving presents to all investors. You may be wondering where I am heading to with this. You may not even agree with me. Make no mistake, if you are an investor or a saver, the minister was on your side yesterday. Let me tell you why?

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What did he say? 

Let me boil it down for you. First was the acknowledgement of the difficult economic situation in the country. This was evident in the downward revision of the growth forecast for 2015 from 2.5 percent to 2.0 percent. The challenges with power supply and its impact on the economy was highlighted. Other issues such as the global economic slowdown, unemployment and inequality were highlighted.

Then came the twist that delighted investors. He talked about tax free savings accounts being a done deal, no hikes in corporate taxes meaning more returns to investors. Easing tax for small businesses means increased opportunities for investors. He also added that the government procurement system is being cleaned and a centralized e-tender system will go live from April first 2015. This means honest business men and women will be able to do business better with government. Clearly, Minister Nene is on the side of investors and businesses. He has caught the revelation that businesses and investors will continue to be at the forefront of job creation and economic growth. The minister did not close his speech without offending some individuals. How did he do this?

In an effort to raise money to meet governments increasing expenditure and debts, sin tax personal income tax, petrol levy, and bond transfer fees among others were raised. For example, there will be a 30. 5c/l increase in the general fuel levy. The Road Accident Fund levy will rise 50c. Sin tax (excise duties on alcohol and tobacco products) went up significantly with tax on whisky up by R3.77.

All in all, the message was clear, there more you consume certain products, the more your tax. If you chose to save, it will be better for you. Despite the shortfalls of the entire budget speech- investors can smile as the minister pronounced incentives to investments, savings and business development. The year 2015 will continue to be an interesting one for investors in South Africa and the minister is in support of an investor friendly environment.

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