South African Medium Term Budget Policy (26 October 2022)
Bernard Sacks – Tax Partner at Mazars in South Africa
“A good, optimistic budget with cautionary words thrown in with uncertainty in the markets. There were a few bold projections, and the question is whether or not these can be met?
“It seems that the honeymoon phase is over regarding additional taxes on commodity prices, however, the corporate sector, which includes finance, banking and real estate, seems to have performed better than anticipated.
“Tax collections are down in some respects, such as the fuel levy, due to the fuel levy relief fund, and is increased in other areas, specifically corporate tax and personal tax.
“No new taxes have been announced, which is normal for this time of year. There have been a number of fresh allocations to SOEs, some of which have been announced. What does seem to be good news is the fair amount of infrastructure spending planned, which, in turn, will assist with stimulating the economy.
“There’s a move afoot for Government to take on a chunk of the Eskom debt; however no detail has been provided on how this will be implemented. Come the main Budget in February, Treasury will need to show how this will be funded.”