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 FROM
BERRY EVERITT
We are delighted that the key focus of the national
Budget presented to Parliament this month is job creation, with
almost R1-trillion over the next three years being allocated to
various plans and projects to boost employment, as this is key to
the survival and growth of the real estate and construction sectors
of the economy.
It is also, as the Finance Minister said, very
disheartening and disturbing to think of 42% of South Africans aged
between 18 and 29 being unemployed, and we wholeheartedly support
the large Budget allocations made to give them new hope of a better
future by improving schools, providing more money for higher education
and creating more vocational and skills training centres.
At the same time, I was very pleased that the Minister
managed to find R8bn for tax relief for individuals that are already
employed, and announced further tax concessions for the small and
micro businesses that provide 68% of all jobs in the private sector.
As I have said before, I think individuals in SA
are paying way too much tax - with personal income tax and VAT (which
is mostly paid by individuals) accounting for more than 50% of SA's
total tax revenue.
And then there are all the other taxes that individuals
pay regularly, such as fuel tax (which was just increased by 10c
a litre), municipal taxes and toll road fees, and the big amounts
that they pay less regularly, such as capital gains tax, estate
duty or property transfer duty. These take their contribution to
total tax revenue to around 60%, which in anyone's terms means that
they are carrying a very heavy tax burden - especially when you
consider that the tax base is currently only around five million
people out of a population of almost 50 million.
Then if you add this to the continually rising
fuel and energy costs that affect every household, it is little
wonder that SA has such a low savings rate - which in the property
context translates directly into the inability to save for a deposit
and to qualify for a home loan.
That is why I have for some time advocated tax
relief for individuals as the simplest and best way to create jobs
- because it increases individual and household disposable incomes,
which stimulates demand for more goods and services, which promotes
increased production which requires more employees.
So here's hoping that this year's tax cuts for
individuals and small businesses are only the first of many over
the next few years.
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