Ratings agencies to closely monitor Budget speech

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Treasury’s Director-General Dondo Mogajane says although South Africa has a new president, he has always been involved in the budget process from day one because the Treasury would go to the cabinet at various intervals to present the fiscal framework and he was part of the cabinet fiscal committee.

This comes as Finance Minister Malusi Gigaba is expected to present his maiden budget speech on Wednesday.

Slow economic growth has meant not enough income in the tax coffers, which in turn could limit the minister in his allocations on Wednesday. However, what most are looking out for is policy positions as the country steps into a new leadership era.

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Senior tax consultant at PPS Investments, Thandisizwe Mahlutshana says ratings agencies will are looking forward to getting answers to questions they have, questions such as how free tertiary education will be funded.

Senior tax consultant at Mazars, Bernard Sacks, says this year may be the year that the minister introduces Vat on fuel.

Yunus Carrim who oversees the Standing Committee on Finance which is the Parliamentary body responsible for the finance cluster says they are wary about an increase in Vat, they are not opposed to it in principle but they will need to look at what the state has done to provide increases on social grants and so on to cater for a possible increase in Vat.

The Auditor General is a chapter nine institution established in terms of the constitution, to strengthen the country’s democracy by enabling oversight, accountability and governance in the public sector through auditing.

The country’s Auditor General, Kimi Makwetu, says they don’t normally say much about the budget because their role is to check whether the money mentioned in the budget speech went to what the minister talked about in the speech.