Budget speech may be just enough to help avoid a downgrade: Absa

MARKET WRAP: JSE closes weaker as renewed risk-off trade hits market

Delivering his Budget speech in Parliament, Gigaba said public procurement - worth hundreds of billions of rand annually - was a critical lever to change the production and ownership patterns of the economy to empower black people, women and youth.

Donations tax rate increases from 20 per cent to 25 per cent on donations of more than R30 million.

"However, the increase of these wealth taxes was a strategic move, in that Treasury has finally grasped the nettle and pulled the VAT lever".

"The Budget will have addressed the concerns of the ratings agencies and worldwide investors". The price of fuel will also increase by 52c/litre and social grants received a 7% average increase.

From 1 April 2018, the Value-Added Tax rate will rise from 14% to 15%, said Gigaba.

"The South African poor is indirectly forced to pay for the errors of the last nine years", Mmusi Maimane, leader of DA said.

MARKET WRAP: JSE closes weaker as renewed risk-off trade hits market

Direct taxes, which have borne the brunt of revenue increases in recent years, were also largely left untouched, although below-inflation adjustments to personal income tax brackets will raise an additional ZAR7.5 billion.

The increase in medical aid levy will deal a further blow to the "missing middle" as they subscribe to the Government Employee Medical Aid Scheme (GEMS) which is now not cheap.

Equal Education "welcomed this reinvestment in NSFAS because it means that the responsibility to fund this sector remains with the state, as opposed to the pro-privatisation models proposed by the Heher Commission: the Income-Contingent Loan Model (ICL) and the Ikusasa Student Financial Aid Programme (ISFAP)". This is a 6.6% annual increase. We are sick and exhausted of the narrative that seeks to create an impression that the public service wage bill is draining the state coffers when year after year the Auditor General is always pointing out wasteful and unauthorized expenditure in government departments and we see no decisive action against this.

"OUTA is pleased to see that the minister managed to find the money to get the free higher education promise started, but he seems to have forgotten that those students will soon need jobs".

The budget speech also reinforced President Ramaphosa's commitments to reviving the state-owned enterprises, whose decline due to poor governance and deep corruption have had serious impacts on the sustainability of the economy in general and our industry in particular.

South Africa opposition, Democratic Alliance (DA), disagreed with him that the Zero-rating food will provide relief to the poor.

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