The 2018 budget was announced during very tight economic times with low growth, an adverse credit ratings environment and high debt to GDP and deficit rates, SACCI believes it was a balancing act under the circumstances.
The R0.52 cents per liter of fuel increased levy is likely to have an adverse inflationary effect which will put many businesses on the backfoot, given the fact that fuel is high input cost in many companies. The outcome will be compounded by the 1% increase in VAT. The 1% increase in VAT may appear marginal however the knock-on effect will impact revenue growth in many businesses.
SACCI is the largest business organization in SA and National Chamber of business and industry, which represents thousands of small and medium enterprises. We believe that the allocation of 2.1bn to the development of small business and start-ups is too small, given the fact that the small businesses and start-ups are the only hope for the creation of jobs. We believe an amount more than R10 billion would have been more appropriate in our context.
The pledge by the Minister to pay suppliers on time is a welcome, urgent and necessary step. We would have wanted to hear more from the Minister on the funding capital gaps affecting the SOEs. This is a critical weakness as the SOEs play a large role in the economy of SA.
We believe that any in taxes in a low growth environment would be a challenge. We support the minister’s decision not to increase taxes on corporate tax and personal income tax.