#Budget2018

‘A tough Budget is a good Budget. We need a VAT increase’

It needs to be a tough Budget. A tough Budget will be a good Budget… We will have to do some drastic things…

Johann Els, Old Mutual Asset Management

Few things in this life are certain.

Death and higher taxes in 2018 chief amongst them.

Expect no good news from this year’s Budget Speech.

President Cyril Ramaphosa is putting pressure on the Finance Ministry to slash spending and increase revenue.

There’s a R50-billion budget shortfall to deal with, on top of funding for fee free higher education.

It is yet unclear if Malusi Gigaba will be the Minister of Finance that will deliver the Budget Speech on Wednesday.

The Money Show’s Bruce Whitfield interviewed Old Mutual Asset Management Economist Johann Els.

Listen the interview in the audio below (and/or scroll down for more quotes from it).

I wouldn’t be surprised at all if there’s new, top marginal rate…

Johann Els, Old Mutual Asset Management

We need a VAT rate increase… it’s a regressive tax but, perhaps in South Africa, not that regressive… We’ve got a significant social security system… We have a big portion that is zero rated… We haven’t seen a VAT increase since the early 90s… Some of the extra income can be redistributed to the poor…

Johann Els, Old Mutual Asset Management

The probability of a VAT rate increase has increased… but it’s still a political hot potato…

Johann Els, Old Mutual Asset Management

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