Finance Minister Malusi Gigaba on Tuesday paid tribute to the population of South Africans for “funding their government” through high tax compliance, despite tough economic circumstances prevailing.
“We continue to be grateful to South Africans for funding their government through high tax compliance even in these challenging times. Reliable and efficient tax collection is a critical capability for a developing country, and [the SA Revenue Services] Sars is an important asset in this regard,” Gigaba said while tabling National Treasury’s budget vote speech in Parliament.
“It [Sars] is charged with collecting R1.2 trillion this financial year. We will continue to work with Sars to ensure it can fulfil its mandate to the nation and collect the revenue required to ensure South Africans fund their fiscus themselves which is a vital test of national sovereignty.”
Gigaba said economic growth for 2016 came in below expectations, leading to an under-collection of tax revenue of more than R30 billion of what was forecast in the 2016 budget.
“Although tax revenues overall under-performed, there was an encouraging increase in corporate income taxes, showing that the economic activity may be starting to accelerate. Tax increases of R28 billion were announced for 2017/18 to consolidate the fiscal position, where the additional value will fall mainly on those with the highest incomes,” said Gigaba.
He said National Treasury would support parliamentary processes aimed at regulating the South African financial sector to make the industry inclusive.
“The financial sector plays a critical role in our country, but this must be enhanced to achieve the aspirations of all South Africans. The joint standing committees on finance and trade and industry have had a number of hearings on the transformation of the financial sector,” said Gigaba.
He said the committees found that the financial sector needed reinvigorating.
“We need to reinvigorate the financial sector charter to ensure all South Africans participate fully in the ownership, management, supply and take-up of financial services. Transforming the financial sector to South Africa better is key, including supporting SMEs and ensuring that financial institutions procure from SMEs and emerging businesses,” said Gigaba.
The former home affairs minister said National Treasury would continue throwing its weight behind parliamentary processes which sought to make the financial sector “fully reflect South Africa’s demographics”.
“It is well established that a well regulated and resilient financial system is a key foundation of any economy, and reduces the likelihood of claims on taxpayer funds to bail out failing banks and other financial institutions during times of crisis,” said Gigaba.
“The long awaited Financial Services Regulation Bill is expected to be passed by the National Council of Provinces today, to ensure the implementation of a comprehensive system for better regulation of the financial sector.”
– African News Agency (ANA)
