Co-Founder at TaxTim Marc Sevitz says no tax decrease for tax payers may be the only disappointment in Finance Minister Tito Mboweni's budget speech.
Mboweni delivered his maiden Budget speech in Parliament on Wednesday.
Tax revenue has been revised down by R15.4 billion compared to treasury's October estimate. Mboweni said there will be no increases in income tax rates and the VAT rate will remain unchanged.
Sevits shared his views on The Money Show with Bruce Whitfield.
Sevitz says the excuse that the under-collection is due to extra VAT payouts and refunds does not hold water.
Because if that is how the economy is working and there is a VAT refund, it says something about the growth in the economy. So the growth rate that has been reduced each year means fewer collections, which means less money and expenditure going up. So where is the money? It can't come from more taxes so it doesn't work.— Marc Sevitz, Co-Founder - TaxTim
Majority of taxpayers will get R153 more in their pocket this year. So the tax bracket not moving for inflation has not resulted in anyone getting an inflationary linked increase as well. They are feeling the full effect of that, so the cost of living becomes more expensive.— Marc Sevitz, Co-Founder - TaxTim
Sars in blunt terms used to help you out by giving you that inflation increase. The larger percentage or bracket that you may fall into - the higher marginal rate - means that that new amount is being taxed more.— Marc Sevitz, Co-Founder - TaxTim
The result is people have less money to spend, he concludes.
Click on the link below to hear more from Sevitz...
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