As South Africa approaches the 2021 National Budget address now, more than ever, the Minister is faced with what is portably the most challenging budget address in years as he aims to improve fiscal deficit by funding relief measures of the Pandemic while ‘keeping the lights on’.
It is predicted that the economy will rebound from last year’s downfall and see a 2.9% growth this year. However, this is reliant on a number of critical factors including most importantly the tight management of state expenditure and a solid position on inclusive economic growth.
We believe that the focus will be very much geared towards what we term “The New Tax Reality”. It is very difficult to predict what budget announcements will be made and what tax increases will be introduced. However, a conundrum exists – government needs more money, yet cannot simply increase taxes. While we lean towards little or no personal income tax increase, with minimal adjustment for the fiscal drag effect and no corporate tax increase, there will be a tax impact at some level. We believe that this means a change in mindset for businesses and individuals when it comes to tax compliance, collection and regulation.
From an economic point of view, we face a significant budget deficit and a myriad of socio-economic challenges that impact the stabilisation and growth of the economy. The state of the global economy, investment into SA, the efficacy of a vaccine, the state of debt and other pressing items such as power generation – all play a significant role, over and above raising the much-needed funds for relief efforts and economic stabilisation.
With the above in mind, KPMG has a team of Tax experts who are available to provide insights and analysis in the build up to the 2021 Budget address, as well as assisting with interpreting the implications of the Budget address on 24 February 2021.
Areas that the KPMG experts can comment on include:
- The New Tax Reality – challenges, changes and key focuses for 2021
- Regulation and expected changes
- Impact on individuals and business
- Key tax implications and what South African treasury hopes to achieve.
I have included an outline of KPMG’s key Tax consultants and their area of expertise below for your easy review.
Employees’ Tax
- Sarika Rautenbach, Associate Director in Global Mobility Services & Employment Tax Advisory at KPMG South Africa
Focus areas:
- Employees’ tax
- Skills Development Levies
- Unemployment Insurance Fund
Corporate Tax
- Alan Field, Director in Corporate Tax at KPMG South Africa
Valued Added Tax
- Liezl Crause, Associate Director in the VAT team at KPMG South Africa
Additionally, KPMG are hosting a Virtual Budget event on Thursday 25 February 2021 at 14h30 with guest economist Dr Azar Jammine and KPMG tax specialists sharing insights in relation to the budget proposals. Sound-bytes are currently available to provide KPMG’s predictions in the build up to the Budget Speech. (https://home.kpmg/za/en/home/insights/2021/02/kpmg-budget-2021.html)