Johannesburg – South African finance minister, Tito Mboweni, will later today deliver his much awaited budget speech to the nation from parliament.
Below, leaders from different industries have shared what they will be hoping to hear in Mboweni’s speech.
“While recent developments suggest that Treasury may have more money in the upcoming Budget than originally anticipated, the fact remains that South Africa’s needs far outweigh what government is able to provide. It’s therefore imperative that the Budget incentivises external investment. Private Equity investment, in particular, should be encouraged as investors in this space commit for the long-term and can help turn around some of the country’s most imperilled companies,” says Bryan Turner, Partner, SPEAR Capital
The Business Exchange
“While there are a lot of pressing issues that we can expect to be addressed in the budget speech on Wednesday, I believe I speak for many entrepreneurs when I say we hope to see economic growth prioritised. Rather than increasing tax rates, we need to see actionable plans for boosting the economy in a sustainable way, and much of that can be achieved by channeling funds to develop and nurture entrepreneurship across sectors. And with some 2.4 million square metres of office space currently standing empty, incentives to companies to do innovative things with inner-city offices that have been abandoned will be particularly progessive at this time when work-from-home appears to be here to stay.” – David Seinker, founder and CEO, The Business Exchange
Relate Bracelets “South Africa’s tourism industry is arguably amongst the sectors hardest hit by the onset of COVID-19, with the associated restrictions on travel and socialising driving the loss of as many as 300 000 jobs. Non-profit organisations have also borne the brunt of the pandemic in terms of lost opportunities for fundraising, tighter budgets and escalating levels of need within communities. Relate, which has raised more than R62,5million for social upliftment, is heavily reliant on the tourists who buy our bracelets, and so has been impacted on both fronts.
“While we remain committed to supporting and assisting South Africa’s most vulnerable communities during these very difficult times, we are looking forward to hearing some good news for the tourism and the NGO sector in this year’s budget. We certainly welcome the President’s launch of the R1.2-billion Tourism Equity Fund, but there is still so much more that needs to be done to help reinstate the tourism sector as a critical contributor to the country’s economy as a whole.” – Neil Robinson, CEO of Relate Bracelets CMS South Africa
On the mooted wealth tax:
“The Minister of Finance no doubt has a tough time in balancing the books. However, in our view, he should resist the temptation to attempt to close the fiscal deficit through adding to the already numerous range of taxes which we have in South Africa, or increasing tax rates. This is too easy and can be counterproductive given the tiny size of the tax base in South Africa and the already onerous aggregate tax rates that are there. We would hope for some innovative thinking from the minister and a focus on solutions which grow the economy and grow the tax base.” – – Andrew Wellsted, Partner and co-head of Tax at corporate law firm CMS South Africa.
On the infrastructure and capital expenditure programmes:
“There is a dire need for public spend. And the range of options is almost infinite: infrastructure improvements, there have been talks of smart cities, monthly pension payments, education spend… one can go on forever. However, we are operating in an environment where the economy is struggling and the tax base is shrinking both in number and extent. The government needs to be very selective about which capital expenditure programmes it embarks on. And the government also needs to bear in mind that each Rand it spends ideally should also assist in bringing in new income into the country. Therefore programmes that please the electorate but don’t enhance the economy or strengthen our ability as an income-earning nation in the future must be carefully considered.” – Andrew Wellsted, Partner and co-head of Tax at corporate law firm CMS South Africa
Hoorah Digital
“Given the opportunity digital affords to the South African population, we must commit to growing the sector in the country. Advancing in digital transformation doesn’t just mean job creation. It also makes industries and sectors, including finance, healthcare, insurance, banking and real estate, more globally competitive and therefore, attractive to investment. It will be most positive to see these issues addressed in the budget speech on Wednesday.” – Shaune Jordaan, co-founder and chief commercial officer, Hoorah Digital.
VPASA
“This may be one of the toughest budgets ever for Finance Minister Tito Mboweni.
As the representatives of a young industry, the Vapour Products Association of South Africa (VPASA) would be extremely disappointed to see an introduction of a tax on vapour products, as was alluded to in the Minister’s Budget last year.
“Now is not the time to introduce excise on our products. Given the impact of the ban on the sale of electronic vapour products ,which lasted four and a half months in 2020, it would be more prudent to give the industry space to recover from the terrible effects of that ban. We would hope the Minister would be mindful of the difficulties of illicit trade, which is running rampant in the tobacco sector and is starting to rear its ugly head in our industry. It would not make sense to introduce excise duties now at a time when most of our members are struggling with a dwindling consumer base and the effects of an explosion in illicit trade in tobacco, which has made electronic vapour products that much more uncompetitive against cheap tobacco products.” – Asanda Gcoyi, CEO, Vapour Products Association of South Africa (VPASA)
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