Personal Tax - Mr Nice Guy - for now
In dishing out R6,5bn in personal income tax relief for individuals in 2010/2011, the finance minister may look like Mr Nice Guy. After all, this comes at a time when government's going to rake in R69bn less than before.
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Tax Morality - It depends on the share
The starting point when talking about tax morality among taxpayers is that everyone must feel they are paying their fair share. Minister of finance Pravin Gordhan, though, is less concerned about what taxpayers perceive to be fair, just that they pay their share.
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Value Added Tax - Not yet a target
The big question raised by the budget - as tax receipts tumbled - is where tax income will come from in the future. The second-highest shortfall in budget revenue in 2009/2010 was lower Vat (value added tax) receipts. This is a reflection of the impact of the economic recession, though we can expect more from this revenue stream if the economy picks up.
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Sin Taxes -- Tougher approach
It will come as no surprise to hear that government will increase its rate of taxation on the twin pleasures of alcohol and cigarettes as of this week. The increases vary between 8,1% and 8,9% on alcohol and between 6% and 16% on tobacco products.
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Corporate Tax - Weak profits hit receipts
There has been a sharp drop of 21,1% in the corporate tax collected in the 2009/2010 fiscal year, from R166bn to R130bn. Treasury estimated that the corporate tax take would be R160bn, overestimating it by R29,5bn. It was the most disappointing performer out of all the revenue sources. In the wake of the lower corporate profits it is no surprise that secondary tax on companies is also 20% down to R16bn.
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Borrowing - A steady upward climb
Even with a tight rein on planned government spending, a steep decline in tax revenues means public sector borrowing will continue to rise sharply. Until last year, government had for some time a limited role in capital markets. That's being reversed completely. The budget deficit is budgeted at 6,2% in 2010/2011 (estimated 7,3% in 2009/2010.
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