Africa-Press – South-Africa. Finance Minister Enoch Godongwana told Parliament’s finance committees on Thursday that the fiscal path he outlined on Wednesday would set the country’s finances on a rocky road to recovery.
Finance Minister Enoch Godongwana said this year’s Medium-Term Budget Policy Statement was one of the hardest the National Treasury has ever had to produce.
He told Parliament’s finance committees on Thursday that the fiscal path he outlined on Wednesday would set the country’s finances on a rocky road to recovery.
But Godongwana remained cautious about whether taxes would be raised in the new budget year to make up a shortfall of R15 billion.Godongwana said that at the heart of the financial crunch was the stagnant economy and the optimistic estimates made when he tabled the main budget in February.
With revenue far lower than expected, government has to trim state allocations and borrow more money.
“We are on a rocky road to recovery with some speed bumps, which make it difficult for us to achieve the required revenue collection and therefore that has implications on our movements forward.”
While budget documents indicate that tax hikes are imminent, Gdongwana is not revealing anything more.
“I think it’s too early to make such a commitment whether we will increase tax or not.”
Opposition parties say they are neither in favour of a hike in value-added tax (VAT) nor in personal income tax, which will further burden already cash-strapped citizens.
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