By Rachel Mohamed
As South Africa faces challenges related to public sector wages, fiscal sustainability, and economic priorities, the upcoming Budget Speech is attracting significant attention. Citizens are eagerly awaiting Finance Minister Enoch Godongwana’s delivery of the budget speech today.
VOC News spoke to South Africans to gather their views on what they expect from the upcoming budget speech. Yusuf Abramjee, the founder of Tax Justice SA, urged Finance Minister Godongwana to avoid imposing unsustainable increases in “sin taxes” during his budget speech. Instead, he emphasized the urgent need to combat the rampant illicit trade that is costing the country over 100 billion rand in tax revenue each year.
Abramjee argues that increasing taxes on legal alcohol and tobacco products will only drive more consumers toward criminals who sell illicit goods.
“The fiscus is hemorrhaging billions because law enforcement is failing to crack down on the massive black markets in these sectors. This must come to an end,” he stated.
He pointed out that “illicit trade in alcohol and tobacco has reached crisis levels, fueled by excessive taxation that has created a price gap that criminals eagerly exploit. As a result, legal business owners are suffering while crime syndicates thrive, robbing South Africa of the funds necessary to provide essential services such as healthcare, education, and infrastructure.”
“Instead of imposing more punitive taxes on law-abiding citizens, the finance minister must ensure that law enforcement and prosecutorial authorities are properly resourced to dismantle the syndicates responsible for the illicit trade. He should also explain why the South African Revenue Service (SARS) has not been directed to revoke the licenses of cigarette manufacturers implicated in illicit trade, money laundering, and tax evasion. By effectively combating these criminal networks, the government could recover billions in lost revenue, relieve pressure on taxpayers, and ensure a more sustainable and fair taxation system. Targeting law-abiding consumers and businesses with even higher taxes will backfire.”
Abramjee further highlighted potential solutions to eliminate the criminal syndicate robbing the country’s economy. “The solution is to clamp down on the illicit economy, reclaim the stolen billions, and use them to build a better South Africa for all.”
Innocentia Mmule Pule, a chartered accountant and director of Mwaloni Holding, expressed hope that there will be more focus on infrastructure spending. “We need to wrap up our economy if we are to achieve the 3% growth projected by the Presidency and Cabinet moving forward. Infrastructure spending will follow through, considering our country’s debt levels. It will be a balancing act because it focuses on capital expenditure rather than disposable income. I believe this would be a good debt for the country, put to good use to stimulate both infrastructure and the economy.”
Pule also voiced her concerns regarding sin taxes. “It’s an easy way for the National Treasury through SARS to collect more income, aside from VAT, which significantly impacts the poor. Fuel levies affect consumers because producers must recover costs from them, making it unmanageable for many.”
Residents of Salt River raised concerns about the high cost of living, with food and electricity prices skyrocketing. “The minister should consider providing more support for pensioners by giving them extra money,” one resident pleaded.
Another resident lamented the high electricity prices, asking, “Not everyone can afford a loaf of bread costing R21. What about those who are unemployed? How are they able to maintain essential items like food and electricity?”
The Finance Minister, Enoch Godongwana, will deliver his medium-term budget speech at 14h00PM this afternoon.
VOC News
Photo: @SAgovnews / X
