An economist at Wits University, Lumkile Mondi, expects Finance Minister Enoch Godongwana to turn to sin taxes to find additional revenue when he delivers his maiden budget speech on Wednesday.
Mondi is among the economists who believe that under the current economic conditions, Godongwana will maintain most of the current tax regimes.
He says commodity prices and the lockdown regulations remaining at Alert Level 1 leading to an improvement in revenue is good news for government.
“The Minister of Finance is expected to keep both personal income tax as well as corporate tax steady because the improvement in revenue driven by commodity prices and most importantly by the lowering of lockdown to Level 1 shows an improved performance from companies from the retail to banks, therefore, I think many South Africans should be worried about excise tax, those that drink and smoke will likely pay more,” says Mondi.
Tax experts on Budget Speech 2022
Tax experts say Godongwana is unlikely to make major pronouncements on taxes in his 2022 budget speech.
They expect very little to no changes in personal income taxes.
Tax expert at the South African Institute of Chartered Accountants (SAICA), Somaya Khaki says, “From a tax perspective we expect a conservative approach as national Treasury has realised some time ago that an increase in tax rates does not necessarily result in an increase in collections and it is not a sustainable long term solution. It is therefore unlikely there will be tax hikes in relation to personal income tax or VAT. But we will probably see inflationary increases in sin taxes and fuel levies.”
Budget 2022 I Economist Isaac Matshego on the budget expectations:
