Whether the ANC are pursuing free higher education like kamikaze pilots, or trying to add another room on to Nkandla, the party are now pushing for a huge tax hike to fill the holes in our economy, according to a report in Business Tech.
There is a R40 billion gap in the country’s revenue, as identified by Malusi Gigaba in his mid-term budget speech. The government’s failure to stop tax dodgers – complimented by rampant corruption and lax regulations against avoidance – is now set to hit ordinary taxpayers right in their pockets.
They’ve effectively punctured their own tyres, and are now asking us to forfeit our own just so the ANC can continue their journey over the edge of a cliff.
Why a tax hike is planned for 2018
In total, they are looking to plug this rand black-hole over the next two years. South Africa’s shortfall actually stands at R80 billion. There is an expected R50 billion to come in expenditure cuts too.
This would equate to annual cuts in expenditure amounting to about R25 billion as well as revenue-enhancing measures amounting to about R15 billion, including where appropriate, tax measures, the presidency said in a statement.
A huge spanner in the works is the near-suicidal attempt to force through a free-fees plan for higher education. The Zuma regime are desperately trying to implement cost-free higher education. It’s noble in theory, but devastating in practice.
Areas facing cuts:
- Social grants payments
- Reducing the rollout of RDP houses
- Freezing government wages
- Halving the military budget
Tax hikes in the last two years have failed to deliver any expected revenue increases. 2015/16 failed to raise the predicted R18 billion, just as 2016/17 failed to earn the R28 billion it was forecast.
But, the third time is a charm right? Here’s the problem. Raising taxes has little-to-no effect on those that are causing the issue. If you aren’t cracking down on those avoiding tax, how are you going to get them to pay an increase?