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Cape Town - South African finance minister Pravin Gordhan has announced that billions will be spent on upgrading roads and infrastructure during his 2017 Budget Speech on Wednesday.
South African taxpayers will be affected by the following: Points from Gordhan's speech:
• An increase of 30c/litre in the general fuel levy and 9c/litre in the road accident fund levy.
• The Provincial Roads Maintenance Grant is allocated R10.8-billion in 2017/18, taking into account the increase in road traffic volumes.
• Sanral receives R15.4-billion over the period ahead for strengthening and maintenance of the national road network, which now stands at 21 946km.
• The development and operation of integrated public transport networks, funded through the Public Transport Network Grant receives R6.2bn in 2017/18.
National Association of Automobile Manufacturers of South Africa (NAAMSA) president, Mike Whitfield, said: "The budget proposals were generally in line with expectations, however, the impact on private consumption expenditure was expected to be quite negative.
"A key feature of the budget was the strong emphasis on economic transformation and inclusive growth. In addition to this, Naamsa would have preferred greater ministerial emphasis on the importance of implementation of the National Development Plan in its totality to facilitate growth and employment in South Africa."
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Naamsa says it supports planned steps to boost investment by providing "greater certainty in a number of areas, as well as the Ministers’ commitment to prudent and disciplined financial administration", and the additional allocations for education and training; as well as social development and assistance aimed at poverty alleviation – there were legitimate concerns about the negative impact on consumer spending and sentiment as a result of the projected increase in the personal income tax burden of over R16.5 billion together with the increases in indirect taxes of around R5.1 billion.
Moreover, the 33% increase in dividend taxation from 15% to 20% would do little to enhance investor sentiment, says the organisation.
Whitfield also said: "Naamsa would have preferred to have seen more emphasis on a number of priorities including the imperative of cuts in government expenditure and steps to achieve higher levels of efficiency in government departments.
"The Ministers’ comments on enhancing the governance and accountability of state owned enterprises and allowing state owned companies to partner with the private sector to grow productive capacity and infrastructure in South Africa – were most welcome."
"Ultimately, however, wealth needed to be created before it could be distributed which reinforced the importance of creating an environment that encouraged and attracted higher levels of international and domestic investment as a means of enhancing South Africa’s economic growth and development prospects."