I'm finding this one extremely difficult to read, and i haven't been as negative on a budget since the 90's.
I think the obvious solution on financing the fiscus, would be to increase the vat rate from 14%. Politically, i don't think the ANC has the willpower to do it......
I do think that fuel levies will be increased significantly as a result of the drop in oil price. The drop in oil price will have the effect of shielding the increase....... I'm sure the minister will jump at the opportunity.
On the normal tax front, income tax brackets, especially in the lower end, will probably be adjusted to cater for fiscal creep. At the higher end of the income scale, i am anticipating increase in effective tax rates, most of it via adjusting of brackets, but it wouldn't surprise me if they adjust upwards the marginal tax rates in the higher brackets.
On the capital gains side, i'd expect a increase in rates (CGT, doesn't bring in much tax revenue, but it certainly makes a political statement). Dividends tax will be increased proportionally to the cgt rate. On companies tax, my guess is that they will leave it as is, but the possibility exists that they will increase by 1 or 2%.
On the non-tax front, it will be interesting to get a update on the national health scheme proposals (would effectively another tax in due course). Plans in respect of SAA, Telkom, Eskom and other state assets, may also be interesting to watch.
