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#Budget2017 – Did Gordhan succeed?

23 February 2017 FAnews Team

Following Thursday’s budget speech by Finance Minister Pravin Gordhan, several companies have reacted to the new revelations. FAnews have received several statements, releases and reactions regarding the 2017 Budget Speech.

Some of the bigger issues mentioned were the announcement of an increased super tax, the future implementation of sugar tax and the higher fuel and Road Accident Fund levy.

Norton Rose Fulbright penned it down really well. “The 2017 budget speech is an object lesson in balancing competing priorities: the need for increased revenue collection set against a number of sensitive political considerations, made more acute by the looming national election in 2019 and the watching brief by the rating agencies.

There has been a significant under-collection of tax in the 2017 financial year, and the resultant tax rate adjustments are to personal income tax (up a staggering 4% at the top end of the spectrum) and dividends tax (increased from 15% to 20%).

While a number of commentators are sceptical as to whether or not these increases will “fill the hole”, they certainly are more palatable to the electorate at large than an increase in Value-Added Tax.

On the positive side, no ambitious spending projects were hastily adopted which should help alleviate the deficit. The Minister stuck to his guns and continued on the course which has marked his tenure in office: presenting conservative but sensible budgets, many of which have been crafted amidst one or other calamity or controversy.” You can click here to read the full Norton Rose Fulbright report.

Here are a few articles to read:

Notes from the Budget 2017 - Lesiba Mothata, Chief Economist at Investment Solutions

Delicate balancing act - Dr Adrian Saville, Chief Investment Strategist at Citadel

Still at the crossroads - Arthur Kamp, Investment Economist at Sanlam Investments

Holding the line… sort of - Nazmeera Moola, Co-Head of Fixed Income, Investec Asset Management

Personal income tax developments - Kelly Pretorius, Senior Associate, Tax, Bowmans

Why we welcome a sugar tax - Dr Craig Nossel, Discovery

Editor’s thoughts:
A well rounded budget as Minister Pravin Gordon has the difficult task of keeping everyone happy. What are your thoughts? Please comment below, interact with us on Twitter at @fanews_online.


Added by Arnold, 23 Feb 2017
The call for urgent job creation and “radical socio-economic transformation” which we so urgently need in SA is directly in opposition to the current overall direction taken on the Insurance laws and its RDR reforms where barriers to enter for new and existing SME’s seems to be high on the regulators menu.
Many advisors will not survive. Ironically it is independent financial advisor that advised the masses in the past 50 years on how to grow and protect personal wealth. Yet the same country and our government that so desperately seeks new wealth creation refuse to believe that new independent advisors can do it again like advisors did in the past. When will the penny drop that we are not in Europe somewhere?

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Added by Michael Hill, 23 Feb 2017
To avoid continuation of the immediate inflationary impact of this budget we must increase productivity. The easy and obvious solution is to embark upon a well managed training programme in basic entrepreneurial skills followed by a modest seed capital grant and paid for monitoring. Such a project completely ignored, so rapid inflation and ratings downgrade unavoidable.
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