OPPOSITION parties have lashed out at the government for hiking income tax, saying it should rather cut the bloated administration and effect strict cost-containment measures.
In his budget speech yesterday, Finance Minister Nhlanhla Nene dealt a blow to high-income earners with significant increases in income tax.
COPE president Mosiuoa Lekota said the party was against tax increases in the constrained economic climate. “Money in people’s pockets is what makes an economy grow.”
Lekota said COPE had for years called on the government to reduce its size as well as strictly implement the Public Finance Management Act and put an end to futile and fruitless expenditure.
DA Eastern Cape finance spokesman Bobby Stevenson also called for a reduction in the size of the cabinet, saying Nene had placed no emphasis on cost-containment measures.
He was disappointed Nene did not speak about putting the economy on a growth path, which he said was key for the hard-hit Eastern Cape where unemployment was at a staggering 41.9%.
UDM leader Bantu Holomisa bemoaned the tax increases and said the right people had to be appointed to the powerful positions to manage the country. “Economic growth will be tough to attain with debt of R1.8-trillion, expected to rise to R2.2-trillion within two years.”
EFF leader Julius Malema said: “We feel there’s a need for an increase in corporate tax to relieve ordinary South Africans of having to carry the burden of contributing a lot [to the public purse].”
But ANC secretary-general Gwede Mantashe said Nene’s tax decisions would create space for more private-sector investment. “The reality is that when the economy is going through difficulties, you rather put incentives than more tax on corporates.”
ANC spokesman Zizi Kodwa said the budget gave clear plans by the government to deal with challenges and grow the economy. “We welcome [it].”