The indirect taxation of cross-border e-commerce transactions have been high on the agenda for tax authorities worldwide. There is clearly a perception that much of these transactions are escaping indirect tax (essentially VAT) because the supplier and consumer are in different jurisdictions.
Officially, for the 2019/20 financial year, government will not be increasing income taxes. The only taxes set to increase are the indirect taxes: fuel levies, excise duties on alcohol and cigarettes, and the new carbon tax coming into effect on 1 June 2019. With these increases government estimates that it will raise an additional R1.2 billion.
The Finance Minister, Tito Mboweni, used the opportunity in the National Budget Speech to address the concerns raised by many South African citizens, corporates and international ratings agencies.
Where is the focus on growing South Africa’s small business sector? That is the overriding question we are left with at the end of Finance Minister Tito Mboweni’s maiden budget speech. The few mentions the Minister made about Small & Medium Businesses were short on detail at a time when we desperately need to supercharge the growth of this segment.
As expected, this was a conservative budget with no sweeping changes to most forms of taxation. The Finance Minister took advantage of some new revenue sources such as carbon taxes, but, for the most part, continued to stick to the script of limiting bracket creep adjustment, sin taxes and fuel levies to raise more money.
The stakes have never been higher, and despite Minister Tito Mboweni’s always-jovial presence in parliament as he tabled Budget 2019, his words prepared us for the bitter medicine that must be swallowed before we can experience economic recovery.