PARLIAMENT, February 22 (ANA) – The National Association of Automobile Manufacturers of South Africa (Naamsa) on Wednesday, said that it would have preferred to see cuts in government expenditure on the budget, as well as steps to achieve higher levels of efficiency in government departments.
This comes after Finance Minister Pravin Gordhan tabled the budget in the National Assembly, with a key feature being a strong emphasis on economic transformation and inclusive growth.
Gordhan presented a variety of taxes, among them being them being a 45 percent tax on all those who have taxable incomes of R1.5 million, or R125,000 a month, and above. It is part of increases in the Budget aimed at raising an additional R28 billion in taxes.
Another tax reform was an increase in the tax rate shareholders pay on dividends. Gordhan said the dividend withholding tax rate would increase from 15 percent to 20 percent, which was expected to raise an additional R6.8 billion.
In a statement, Naamsa president Mike Whitfield said that the budget proposals were generally in line with expectations though the impact on private consumption expenditure was expected to be quite negative.
Whitfield said Naamsa would have preferred greater ministerial emphasis on the importance of implementation of the National Development Plan in its totality to facilitate growth and employment in South Africa.
“There were legitimate concerns about the negative impact on consumer spending and sentiment as a result of the projected increase in the personal income tax burden of over R16.5 billion together with the increases in indirect taxes of around R5.1 billion,” Whitfield said.
“Moreover, the 33 percent increase in dividend taxation from 15 percent to 20 percent would do little to enhance investor sentiment.”
Whitfield said Naamsa welcomed Gordhan’s comments on enhancing the governance and accountability of state owned enterprises and allowing state owned companies to partner with the private sector to grow productive capacity and infrastructure.
“Ultimately, however, wealth needed to be created before it could be distributed which reinforced the importance of creating an environment that encouraged and attracted higher levels of international and domestic investment as a means of enhancing South Africa’s economic growth and development prospects,” Whitfield said.
– African News Agency (ANA)
