Two key encouraging messages in budget 2015

Author:  Carin Smith – Fin24

Cape Town – There are two key encouraging messages from Finance Minister Nhlanhla Nene‘s budget for Anthea Scholtz, tax director at Deloitte.

The first is that government is not going to be “irrational” by implementing major tax increases, lots of new legislation or many new taxes as was anticipated beforehand.

“The minister calmed the nerves with his budget 2015. The question is, however, will the SA Revenue Service be as rational when it enforces the legislation?” asked Scholtz at a post budget event hosted by Deloitte on Friday.

The second key message for her from the budget is that Nene also noted that government must be accountable to taxpayers and to make sure that taxpayers get value for money.

READ: Nene’s budget strikes balance – economist

Regarding the tax proposals in the budget, Scholtz pointed to three key objectives, which she said are also recommendations by the Davis Tax Committee:

– To enhance the progressive nature of the SA tax system – where the richer pay more;

– To make sure that all the taxes due are collected – including an increased focus on profit shifting;

– To realise a structural improvement in the tax system – to get the balance right in the tax mix in order to optimally try and increase growth.

“We should count ourselves lucky that the minister did not announce a wealth tax, for instance,” said Scholtz.

“He did, however, send a clear message to companies on base erosion and profit shifting, which are global issues and squarely on Sars’ radar.”

Overall, in her view, budget 2015 has been very kind to small businesses and middle income earners.

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