Too early to make call on tax hikes, Godongwana tells MPs
Finance Minister Enoch Godongwana is playing his cards close to his chest on any possible tax hikes during the February budget speech.
Godongwana answered questions virtually from MPs in Parliament on Thursday after delivering the mid-term budget policy statement in Parliament on Wednesday afternoon.
The minister said that due to increased government spending, gross debt would rise from R4.8 trillion in the current financial year to R5.2 trillion in the next and exceed the R6 trillion mark by 2025/26.
Some economists are predicting that the treasury is likely to increase taxes in an attempt to mitigate the growing national debt.
"Normally, in the Mid-Term Budget Policy Statement, we don't deal with tax issues. They are dealt with in the normal budget in February. There is an expectation that we should say something now about tax matters.
"I think it is too early to make such a commitment whether we will increase tax or not. It is too early to say that."
Godongwana said rising debt levels are not the problem but rather the crowding of social spending and a stagnant economy.
He told MPs the budget cuts have not been proportional but strategic.
On reconfiguration of government to save costs, Godongwana said they can’t finalise the conclusion before finalising the next medium-term policy statement, and ultimately, President Cyril Ramaphosa will make the final decision.
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