Latest news with #PersonalIncomeTax
The Star
21-05-2025
- Business
- The Star
Cosatu critiques Finance Minister's Budget as insufficient for economic growth
Ashley Lechman | Published 7 hours ago Trade union, The Congress of South African Trade Unions (Cosatu) said on Wednesday that it does not think Finance Minister Enoch Godongwana's third Budget attempt was enough to stimulate growth for the country's economy. "We welcome government's decision to withdraw the proposed VAT hike as it would have been an unnecessary burden to workers struggling to cope with the rising costs of living. I t is a positive moment in our democratic evolution, when government led by the African National Congress, shows the political maturity and humility by responding positively to the concerns of Cosatu and society," Cosatu stated. The union added that it cannot support tax hikes upon the working class and the poor who are already highly indebted. "Whilst appreciating the scrapping of the VAT hike, we remain deeply distressed that for two years in a row, Personal Income Tax brackets have not been adjusted for inflation. This will see workers at the margins of the next tax bracket in danger of paying higher taxes when receiving their annual increases. This trend must be reversed. Whilst regretting the decision not to extend VAT exemptions for additional food items or provide further fuel price relief, we urge government to pursue additional measures to cushion indigent households from poverty, in particular expanding free electricity and water," Cosatu said. "The Federation commends the R4 billion boost to the South African Revenue Service's tax and customs compliance efforts. SARS has shown that it has the capacity to deliver. The R7.5 billion allocated to it over the Medium-Term Expenditure Framework (MTEF) is an important step towards enabling it to ramp up collection of the R800 billion in owed taxes and improving tax compliance by at least R60 billion annually. It is critical that SARS be given every possible support to achieve these tax compliance targets. The tax regime must be reviewed to provide relief for low-income earners and ensure wealthy individuals and companies pay their fair share," Cosatu added. Cosatu said that further discussions must take place on how the Reserve Bank's currency reserves can support the fiscus. "We welcome government's acknowledgment that bleeding the public services working-class communities and businesses depend upon is reckless and harmful to the economy. The 5.4% increase in expenditure over the MTEF and allocations to frontline services, in particular including the rolling out of Early Childhood Education to 700 000 learners and tackling the school infrastructure backlog, refurbishing 660 health facilities, investing in Home Affairs' capacity, Defence and Correctional Services will be a step forward to repair damage inflicted by previous austerity budget cuts. However more must be done," Cosatu said. The minister committed to hiring more teachers (1000 plus allocations to save 5500 existing posts), Home Affairs, police (4000), prosecutors (250) and border management officers, amongst other critical frontline personnel will boost public services. "But we remain deeply dismayed by the reduced low allocations for doctors (800) and nurses. The implementation of the public service wage agreement will help public servants heal financial wounds. We are concerned about the impact the loss of valuable skills and experience by public servants who opt for early retirement, may have upon the state's ability to provide public services. Government must move with speed to identify any ghost posts in the state, as well as boost effort to tackle corruption and wasteful expenditure," Cosatu said. The union said that it applauds the outstanding work done by Eskom and municipal workers to overcome load shedding. "We are pleased that the debt relief package has provided Eskom breathing space to ramp up maintenance. It is critical that Eskom be given more support to tackle corruption, wasteful expenditure, cable theft and bring on board new generation capacity. The allocation of R219bn for energy infrastructure will be an invaluable boost as will the electrification of an additional 300 000 homes. These measures must translate into affordable electricity if the economy, in particular mining and industry are to survive and grow," Cosatu said in a statement. "The turnaround of South African Airways is testimony that state-owned enterprises can be turned around to once again become enablers of economic growth. Whilst government is naturally reluctant to provide further debt relief to SOEs, Transnet should be assisted to settle its debt to free up capital for the modernisation of its port and railway network as these will unlock the mining, manufacturing and agricultural sectors, creating thousands of badly needed jobs and boosting state revenue. We are concerned by the reduction to R12.7 billion for Metro Rail's signal upgrades but hope its total R66 billion allocation will secure its efforts to return to full capacity, thus enabling 10 million workers and commuters travel quickly and save money on transport," the union added. "Treasury needs to honour its court signed business rescue agreement to provide the Post Office with the long delayed R1.8 billion injection. This should not be delayed over the MTEF. We urge government to table the Road Accident Fund (RAF) and Benefits Scheme Bills at Parliament as part of a package of interventions to set the RAF on a sustainable path and ensure its funds are directed to the poor not the wealthy, let alone insatiable ambulance chasing lawyers," Cosatu added. Cosatu said, "We welcome the various progressive provisions in the Budget, which Cosatu campaigned for, including allocating 61% for social wage expenditure. We are, however, disappointed by the failure to show any relief for the 8 million SRD Grants and government's continued shyness to drastically ramp up sufficient resources to support SMMEs, industrialisation and export sectors, as well as public employment programmes." " The Budget does not foresee growth rising beyond 2% over the next decade whilst we desperately need at least 3% growth if we are to turn the corner on unemployment. We dare not normalise a 43.1% unemployment rate. This is a ticking time bomb that will one day explode and the price of picking up the pieces will be far greater than we can afford," Cosatu added. The union said it is calling upon Parliament and Government in the run up to the MTBPS and the 2026 Budget, to initiate a national dialogue on what are our expenditure priorities and what we can live without, and what are the acceptable and unacceptable revenue streams to fund these. "We cannot afford to continue to stumble along a meek path of business as usual and expect better results. A bold and decisive Marshall Plan is needed if we are to capacitate the state, stimulate growth and slash unemployment. We do not have endless time to make the bold changes our many socio-economic crises demand. COSATU will be seeking further engagements with government on these burning matters," the union further stated.
IOL News
21-05-2025
- Business
- IOL News
Cosatu critiques Finance Minister's Budget as insufficient for economic growth
A red flag with the Cosatu logo Cosatu's response to the Budget: Calls for more support for low-income earners Image: File. Trade union, The Congress of South African Trade Unions (Cosatu) said on Wednesday that it does not think Finance Minister Enoch Godongwana's third Budget attempt was enough to stimulate growth for the country's economy. "We welcome government's decision to withdraw the proposed VAT hike as it would have been an unnecessary burden to workers struggling to cope with the rising costs of living. It is a positive moment in our democratic evolution, when government led by the African National Congress, shows the political maturity and humility by responding positively to the concerns of Cosatu and society," Cosatu stated. The union added that it cannot support tax hikes upon the working class and the poor who are already highly indebted. "Whilst appreciating the scrapping of the VAT hike, we remain deeply distressed that for two years in a row, Personal Income Tax brackets have not been adjusted for inflation. This will see workers at the margins of the next tax bracket in danger of paying higher taxes when receiving their annual increases. This trend must be reversed. Whilst regretting the decision not to extend VAT exemptions for additional food items or provide further fuel price relief, we urge government to pursue additional measures to cushion indigent households from poverty, in particular expanding free electricity and water," Cosatu said. "The Federation commends the R4 billion boost to the South African Revenue Service's tax and customs compliance efforts. SARS has shown that it has the capacity to deliver. The R7.5 billion allocated to it over the Medium-Term Expenditure Framework (MTEF) is an important step towards enabling it to ramp up collection of the R800 billion in owed taxes and improving tax compliance by at least R60 billion annually. It is critical that SARS be given every possible support to achieve these tax compliance targets. The tax regime must be reviewed to provide relief for low-income earners and ensure wealthy individuals and companies pay their fair share," Cosatu added. Cosatu said that further discussions must take place on how the Reserve Bank's currency reserves can support the fiscus. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ "We welcome government's acknowledgment that bleeding the public services working-class communities and businesses depend upon is reckless and harmful to the economy. The 5.4% increase in expenditure over the MTEF and allocations to frontline services, in particular including the rolling out of Early Childhood Education to 700 000 learners and tackling the school infrastructure backlog, refurbishing 660 health facilities, investing in Home Affairs' capacity, Defence and Correctional Services will be a step forward to repair damage inflicted by previous austerity budget cuts. However more must be done," Cosatu said. The minister committed to hiring more teachers (1000 plus allocations to save 5500 existing posts), Home Affairs, police (4000), prosecutors (250) and border management officers, amongst other critical frontline personnel will boost public services. "But we remain deeply dismayed by the reduced low allocations for doctors (800) and implementation of the public service wage agreement will help public servants heal financial wounds. We are concerned about the impact the loss of valuable skills and experience by public servants who opt for early retirement, may have upon the state's ability to provide public services. Government must move with speed to identify any ghost posts in the state, as well as boost effort to tackle corruption and wasteful expenditure," Cosatu said. State-Owned Enterprises (SOEs) The union said that it applauds the outstanding work done by Eskom and municipal workers to overcome load shedding. "We are pleased that the debt relief package has provided Eskom breathing space to ramp up maintenance. It is critical that Eskom be given more support to tackle corruption, wasteful expenditure, cable theft and bring on board new generation capacity. The allocation of R219bn for energy infrastructure will be an invaluable boost as will the electrification of an additional 300 000 homes. These measures must translate into affordable electricity if the economy, in particular mining and industry are to survive and grow," Cosatu said in a statement. "The turnaround of South African Airways is testimony that state-owned enterprises can be turned around to once again become enablers of economic growth. Whilst government is naturally reluctant to provide further debt relief to SOEs, Transnet should be assisted to settle its debt to free up capital for the modernisation of its port and railway network as these will unlock the mining, manufacturing and agricultural sectors, creating thousands of badly needed jobs and boosting state revenue. We are concerned by the reduction to R12.7 billion for Metro Rail's signal upgrades but hope its total R66 billion allocation will secure its efforts to return to full capacity, thus enabling 10 million workers and commuters travel quickly and save money on transport," the union added. "Treasury needs to honour its court signed business rescue agreement to provide the Post Office with the long delayed R1.8 billion injection. This should not be delayed over the MTEF. We urge government to table the Road Accident Fund (RAF) and Benefits Scheme Bills at Parliament as part of a package of interventions to set the RAF on a sustainable path and ensure its funds are directed to the poor not the wealthy, let alone insatiable ambulance chasing lawyers," Cosatu added. Cosatu said, "We welcome the various progressive provisions in the Budget, which Cosatu campaigned for, including allocating 61% for social wage expenditure. We are, however, disappointed by the failure to show any relief for the 8 million SRD Grants and government's continued shyness to drastically ramp up sufficient resources to support SMMEs, industrialisation and export sectors, as well as public employment programmes." "The Budget does not foresee growth rising beyond 2% over the next decade whilst we desperately need at least 3% growth if we are to turn the corner on unemployment. We dare not normalise a 43.1% unemployment rate. This is a ticking time bomb that will one day explode and the price of picking up the pieces will be far greater than we can afford," Cosatu added. The union said it is calling upon Parliament and Government in the run up to the MTBPS and the 2026 Budget, to initiate a national dialogue on what are our expenditure priorities and what we can live without, and what are the acceptable and unacceptable revenue streams to fund these. "We cannot afford to continue to stumble along a meek path of business as usual and expect better results. A bold and decisive Marshall Plan is needed if we are to capacitate the state, stimulate growth and slash unemployment. We do not have endless time to make the bold changes our many socio-economic crises demand. COSATU will be seeking further engagements with government on these burning matters," the union further stated. BUSINESS REPORT Visit:
India.com
08-05-2025
- Business
- India.com
Wages Of War: Can Pakistan Stack Up On Financial Firepower Vis-a-Vis India? How Much Taxes Do Pak Salaried Individuals Pay?
New Delhi: India's successful precision strikes on multiple Pakistani terror camps under Operation Sindoor once again showed the latter's continuous resolve to fight against cross-border terrorism. However, amidst the ongoing India Pakistan Tension, if matters escalate further, does Pakistani have enough economic resilience to wage war with India? The precarious tax revenue situation in Pakistan is directly linked to its economic woes. And that in turn affects its state capabilities. In case of a long-drawn conflict with India, the financial odds are heavily loaded against Pakistan. The latter may literally run out of money before it runs out of bullets. The fiscal year of Pakistan begins on July 1 and ends on June 30. A record PKR 391 billion in income tax was paid by the salaried class in the nine months from July 2024 to April 2025. The blue-eyed traders paid only 60 paisa in taxes during the July-March period while the salaried class paid 10 out of every 100 Pakistani rupees. Several media reports have revealed that 10 percent of the total income tax collected in Pakistan is currently paid by salaried individuals, thus indicating a severely discriminatory tax system. According to Pakistan's Federal Board of Revenue's (FBR) preliminary collection estimates the income tax payments for the nine months of this fiscal (running from July 2024- April 25) year totalled Rs 391 billion which is Rs 23 billion more than the total amount of income tax paid by the salaried class during the 12-month period of the previous fiscal year. The middle and upper-middle income classes were greatly impacted in June 2024 when the government eliminated several tax brackets and drastically increased the tax burden on salaried individuals. Those who earn Rs 443,000 per month are now subject to the highest tax rate of 35 percent. A 10 percent surcharge has been added and that has brought the total tax rate to 38.5% for the highest slab. IMF Vs Pakistan: Disagreement Over The New Income Tax Rates A disagreement over the new income tax rates for salaried and non-salaried individuals caused Pakistan and the IMF to abandon their talks last year without reaching a consensus. To generate additional revenue for the government that is struggling financially, the International Monetary Fund (IMF) suggested last March that Pakistan implement several measures like raising taxes and lowering tax slabs, a media report stated. The IMF has evaluated that the complete implementation of the Personal Income Tax guidelines might result in an additional revenue of 0.5 per cent of the GDP, equivalent to Pakistani Rs 500 billion annually, The News International reported. India Vs Pakistan Economy: A Juxtaposition India's GDP in 2024 was estimated at $4.2 trillion and that of Pakistan was $374 billion. India's per capita GDP was $2,711 in 2024 and that of Pakistan was $1,581. While India is expected to overtake all other economies as the world's third largest economy within the next ten years, the IMF has reduced Pakistan's 2025 GDP growth estimate from 3 percent to 2.6 percent. Pakistan is contemplating important adjustments in its tax policy for the fiscal year 2025-26 budget. The FBR plans to raise the yearly tax exemption threshold for salaried individuals from Rs 600,000 to possibly Rs 1,000,000 or Rs 1,200,000. Considering, a very small percentage of Pakistan's citizens pay income tax, limiting government capacity for public investment and debt repayment, can the country afford to wage a full blown war with India? The scope seems extremely restricted serious doubt whether Pakistan can afford to go to war with India.
23-04-2025
- Business
The REAL cost if May 2025 VAT increases go ahead
As the DA and EFF interdict May 2025 VAT increases in the Western Cape High Court, economists have revealed the long-term cost of these measures. Latest research from the National Agricultural Marketing Council (NAMC) points to the negative impact May 2025 VAT increases will have on the South Africa economy. Should May 2025 VAT increases go ahead, it could cause long-term damage to the economy. This includes killing jobs and reducing overall government revenue, not increasing it. According to NAMC's modelling, not only will May 2025 VAT increases bring in less money than expected, but over time it will have negative secondary effects on various industries. As such, NAMC estimates real GDP will fall by 0.21 percentage points and significantly reduce household spending. Next, while VAT collection will increase, other forms of tax revenue collection will likely fall due to lower disposable income. In turn, this will lower Personal Income Tax (PIT) collections, something NAMC calls the 'general equilibrium effect.' Therefore, if May 2025 VAT increases go ahead, higher income expenditure elasticities are bound to be hardest hit. These include vehicles, electronics, other household luxury consumables and real estate transactions subject to VAT. Basically, the National Treasury can't have its cake and eat it, too … The Finance Minister has also increased excise on alcohol and tobacco products – the so-called 'sin tax.' But here, too, any short-term increase in revenue collection jeopardises long-term prospects of the industry. A 6.8% increase in excise duties on alcohol is expected to have ripple effects across the wine and brandy industries. NAMC estimates an additional R1 billion in revenue will be offset by losses due to lower economic activity and disposable income. 'Our simulation suggests that for every R1-billion increase in excise duties collected due to higher tax rates, other tax revenue collected may fall by around R0.25 billion,' says NAMC. Therefore, at an industry level, the excise duty increase could result in the beverage industry's sales falling by 0.3%. South Africa's beverage industry contributed 3.6% (R226.3 billion) to South Africa's GDP. And the industry employs approximately 500 000 people. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
Local Spain
31-03-2025
- Business
- Local Spain
EXPLAINED: Who has to do a tax declaration in Spain in 2025?
The Spanish tax season is almost upon us, beginning on April 2nd and ending on June 30th, meaning that you have to file your income taxes between these dates. Personal income tax is known as IRPF in Spain (Impuesto sobre la Renta de las Personas Físicas) and the annual income tax return is called la declaración de la renta. This year you must report any income you earned during the previous financial year, which was 2024. The Spanish tax year is the same as the calendar year, unlike in the UK for example where it runs from April to April. The general rule is that anyone who lives in or stays in Spain for more than 183 days a year is considered to be a tax resident and must fill out the annual income tax form. 'If you stay in Spain for more than 183 days during the calendar year," you are usually considered a tax resident here states Spain's Tax Agency (Agencia Tributaria). If you have a complicated situation where you split your time between two or more countries, or if you have property or a business in other countries, there are international tax treaties, which state where you should be considered a resident and where you need to declare your income for tax purposes. In this case it would be best to hire a tax expert to guide you. Those who are classed as a tax resident in Spain will be subject to pay tax on their worldwide income, which includes income from rental properties overseas for example. Article 96 of the Personal Income Tax (IRPF) regulations establishes that all taxpayers must file a tax return, but there are certain exceptions. Generally, if you are resident in Spain you will have to complete la declaración de la renta if you meet the following requirements: You received more than €22,000 annually from a single employer. You had multiple employers, but your income from the second or subsequent ones exceeded €1,500 annually. You earned more than €15,876 from two or more employers, if the second employer paid you more than €1,500 annually. Individuals with capital income and capital gains subject to withholding or advance payment exceeding €1,600 per year. Autonómos or self-employed workers who were registered as such at any point in 2024. Even if they made a loss. Taxpayers with real estate income, non-withholding capital gains from Treasury Bills, subsidies for the purchase of social housing, and other public aid exceeding €1,000 per year. Those who received the Ingreso Mínimo Vital (IMV) or Minimum Vital Income in 2024, as well as members of their household. Those who want to request refunds such as deductions for maternity, large families, or disability, as well as deductions for withholdings and instalment payments. Taxpayers who applied for the transitional deduction regime for investment in housing, for international double taxation, or those who have made contributions to protected assets of people with disabilities, pension plans, dependency insurance, among other social security instruments. Those who exclusively earned gross income from exclusively from capital or economic activities, as well as capital gains exceeding €1,000 per year and capital losses of more than €500.
