Pretoria: Finance Minister Pravin Gordhan’s 2014 Budget has been welcomed by business, saying the statement offered solutions to pressing issues.
The minister delivered the last budget under the current administration in Parliament on Wednesday.
“We are pleased with the national budget speech delivered by Minister Gordhan as the statement recognised and offered some solutions to several pressing concerns in the business community. The message that it’s time for action and implementation is especially welcome and SACCI hopes that this tone is carried forward into the next administration,” said South African Chamber of Commerce and Industry (SACCI) CEO Neren Rau.
Minister Gordhan announced that government’s spending will be R1.25-trillion for the 2014/15 financial year and that consolidated non-interest spending will increase to R1.3-trillion by 2016/17 – an increase of about 2% per year over the next three years.
Sacci welcomed the attention that was paid to small business, saying that the tax compliance rebate proposal will reduce the administrative burden. “The tax compliance rebate proposal will reduce administrative burden and the recognition that the turnover tax is not working in its current form recognises the advice from the business community,” said Rau.
The R6.5 billion for SMME support over two years and tax exemption for grants to SMMEs will open significant funds to this sector, added SACCI.
It added that support announced in the budget for small scale farmers will help an otherwise overlooked industry.
“Sacci is truly impressed by this,” said Rau.
The Minister announced that the budget deficit is set to narrow to 2.8% of GDP over the next three years.
“The reduction in the deficit-to-GDP is a strong signal to investors that South Africa is committed to building investor confidence,” said Rau.
Business also welcomed the update on work done by the Chief Procurement Officer (CPO) as well as other efforts to address corruption.
The National Association of Automobile Manufacturers of South Africa (NAAMSA) President Dr Johan Van Zyl welcomed the fact that the budget did not contain major tax shocks with tax increases limited to the fuel levy, tobacco and alcoholic products.
“Encouragingly, the budget proposals provided generous personal income tax relief to the extent of R9.3 billion as well as enhanced retirement benefits. The additional expenditure on social priorities and particularly in respect of education, training and skills development also represented a welcome feature of the budget,” said Van Zyl.
NAAMSA welcomed the postponement of the proposed emissions tax regime to 2016. “Further consultation on the principle of an ambitious carbon tax regime was both necessary and advisable,” he added.
The overall budget proposals, said NAAMSA should support higher levels of economic activity domestically and the budget provisions and the progressive reduction in the budget deficit, should be well received by international and domestic investors and financial markets, he added.
Nedbank welcomed the budget, saying that it provided a sensible framework that balances competing demands of fiscal consolidation and increasing needs.
“He has increased controls on spending and is looking to widen their scope in future budgets. The reaffirmation of the National Development Plan (NDP) as the agreed way forward is also encouraging for the business and investment community,” said Nedbank in its analysis.
SOURCE: South African Official News