South Africans may be hit by a once-off tax next week, Old Mutual warns
An extra tax on income for individuals and companies – as well as another VAT hike – is on the cards in next week’s national Budget, according to Old Mutual Investment Group’s chief economist Johann Els.
Finance minister Tito Mboweni will deliver his Budget speech on Wednesday.
Government finances are in such bad shape that Els expects extra income tax for individuals and companies, similar to the once-off “transition levy”, which taxpayers had to pay in 1995.
To finance the cost of the elections and the “transitional process to democracy”, South Africans had to pay an extra 5% of taxable income in excess of R50 000.
A VAT increase may also not be ruled out, Els added. Absa earlier predicted that VAT will be increased to 16% in the Budget next week. VAT was hiked to 15% in February 2018.