S.Africa's 2025 budget: Tax industry reaction

South Africa's 2025 budget proposal has sparked mixed reactions from industry experts and taxpayers alike. In a recent interview on CNBC Africa, Tax Director at Deloitte, Ruben Johannes, and South African Revenue Service Commissioner, Edward Kieswetter, shared their insights on the budget speech delivered by the Minister of Finance. The key theme of the discussion revolved around the balance between government spending needs, revenue generation, and the impact on businesses and consumers. Here are the key points highlighted in the interview: Firstly, Johannes emphasized the importance of improving revenue collection through efficient tax practices to reduce the country's dependence on borrowing. He welcomed the allocation of additional funding to the South African Revenue Service (SARS) to enhance its capacity for collecting taxes effectively. Secondly, Kieswetter acknowledged the challenges faced by the government in finding a balance between stimulating economic growth and addressing social welfare needs. He highlighted the budget's attempts to provide a stimulus for all constituencies while protecting vulnerable groups through measures such as minimal VAT increases and additional benefits for the poor. Lastly, both experts expressed concerns about the VAT rate increase proposed in the budget, citing the burden it places on taxpayers who are already feeling overtaxed. Johannes raised questions about the funding shortfall of $30 billion in the revised budget, indicating a potential increase in debt to cover the gap. Overall, while the experts appreciated some aspects of the budget aimed at equitable distribution of benefits, they expressed reservations about the impact of increased taxation and government borrowing on the economy. As South Africa navigates the challenges of balancing revenue generation and expenditure, stakeholders are keenly watching how the government will address the funding gap and stimulate economic growth.