Independent Economist Ndumiso Hadebe says a no growth environment and a constrained fiscal budget are some of the issues that have limited the number of policy choices available to Finance Minster Tito Mboweni.
Mboweni delivered his mid-term budget policy statement on Wednesday, announcing a zero VAT on three more items from next April – white bread flour, cake flour and sanitary pads that will result in a R1.2 billion loss to the fiscus. He has also promised to hold off on any further tax hikes.
To the disappointment of some South Africans, the minister has endorsed the e-tolls system, saying the public should adopt a “user-must-pay” mentality.
Hadebe says this may be another revenue generator for the fiscus.
We would hope to understand more around the legislation around the e-tolls. There is nothing really that legally binds motorist to the payment of e-tolls.— Ndumiso Hadebe, Independent Economist
Hadebe says this was a very difficult budget.
One of the key numbers that also came out was the revenue shortfall in the medium term. We are now at a R48 billion shortfall that we are looking at in the 2019/2020 financial calendar.— Ndumiso Hadebe, Independent Economist
Given the expenditure side, the need for public spending and developmental needs as a consequence, that speaks to the constrained fiscal policy choices that were available.— Ndumiso Hadebe, Independent Economist
What it does certainly speak to is that in the medium term, it is going to take quite active steps to really consolidate on our debt but I think the horizon post medium term is quite promising for South Africa.— Ndumiso Hadebe, Independent Economist
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