Latest news with #R300bn
TimesLIVE
24-04-2025
- Business
- TimesLIVE
IEJ welcomes government's decision to reverse 'regressive' VAT hike
The Institute for Economic Justice (IEJ) has welcomed the decision to reverse the VAT hike, which it says is a regressive tax that would have disproportionately harmed the poor, low-income workers and the struggling middle class. 'We caution that this reversal should not open the door for budget cuts as appears to be the National Treasury's preference.' It said while begrudgingly conceding on the issue of the VAT hike, the National Treasury and finance minister Enoch Godongwana appeared to double down on their ideological rejection of progressive revenue alternatives. 'This flies in the face of evidence presented in parliament by the IEJ and other civil society organisations, as well as by political parties, which show that many alternatives are readily available.' The IEJ said the 0.5 percentage point VAT increase, at best, would have secured R13.5bn in revenue, which was a tiny 0.5% of the national budget. 'It has recently emerged that the revenue overrun collected by Sars (of about R9bn) alone, without further revenue or budget cuts, largely fills this hole. 'It also highlights the failure by the National Treasury to find innovative ways to raise revenue that can immediately unlock resources to further finance essential services and expand public investment,' the IEJ said. The organisation said there were a number of immediate sources of revenue. These included: ● Tapping into the Gold and Foreign Exchange Reserve Account (GFECRA), which still has over R300bn available to the government; ● Removing tax breaks for high-income earners (those earning above R1m per year), such as those linked to pensions or medical aid contributions. The government spent about R51bn on these in 2022/23; and ● Raising the corporate income tax rate back to 28%, as the previous reduction to 27% failed to attract investment. This would have raised an extra R12bn in 2024/25. The IEJ said that over the medium term, other measures, including a wealth tax, social security tax, and financial transactions tax, are available that could generate significant revenue and reduce inequality.
Zawya
04-04-2025
- Business
- Zawya
South Africa: Gauteng pitches $15bln investment opportunities to the world
Gauteng Economic Development MEC, Lebogang Maile, announced the province's goal of securing R300bn in investment pledges at the Gauteng Investment Conference (GIC) set to take place at the Johannesburg Stock Exchange in Sandton on Thursday, 3 April 2025. 'Leaders across all tiers of government, including Minister of Trade, Industry and Competition, Parks Tau, Premier of Gauteng Premier Lesufi, and Johannesburg Mayor Dada Morero, are providing inputs at the conference. 'Of equal significance is the large contingent of leaders across the business and government sectors on the African continent, the African diaspora and the globe. With over 50 companies represented, the conference is a convergence point of the world's most important companies in various sectors,' Maile said. The Gauteng province is of importance for South Africa's economy and contributes at least 33% to the national Gross Domestic Product, and nearly 7% of sub-Saharan Africa's output. 'The [GIC] is a transformative event in affirming the place of the Gauteng province in the continental economy. We are asserting that the development of Gauteng is in the best interest of South Africa, the Southern African Development Community and the continent broadly. 'Thus, investment in the economy of Gauteng extends beyond the confines of its provincial borders into other lands across the entire continent,' the MEC said. Furthermore, the conference is serving as a platform for critical dialogue that will 'enable direct engagement between policy makers, investors and industry experts'. 'This ensures that we come out with tangible and applicable outcomes. The sessions are focusing on, among other things, public-private infrastructure investments, as well as Gauteng's key, most dynamic and high growth sectors, including…advanced manufacturing, green and renewable energy, ICT [information and communication technology] and data infrastructure, transport and logistics, smart property development and urban regeneration, as well as tourism and the creative economy,' he said. Maile emphasised that these sectors are critical to ensuring development on a provincial, national and continental level. 'Investment in these sectors offers the most reliable instrument for ensuring sustainability and development, offering a clear path to economic prosperity that is anchored on inclusive growth, environmental protection and human development,' Maile said All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
Zawya
28-03-2025
- Business
- Zawya
South Africa: Allan Gray Makers and E Squared Investments launch Imara SMME Fund
The fund aims to transform 20,000 artisan SMMEs into drivers of job creation and community growth. In a bold move to reshape South Africa's economic landscape, the Imara Artisan SMME Fund has officially launched, pledging to empower the nation's unsung heroes: artisan entrepreneurs. Spearheaded by Allan Gray Makers and seeded by E Squared Investments, this fund targets the R300bn funding gap stifling small and medium enterprises (SMMEs) in critical artisan trades. The initiative aims to bridge this critical gap by empowering 20,000 artisan microbusinesses to spur job creation, strengthen local economies and foster inclusive socioeconomic progress. Derived from the Kiswahili words for 'strength' and 'resilience,' IMARA transcends the traditional definition of a fund, it stands as a lifeline for South Africa's unsung economic backbone: its artisans. These skilled individuals, who craft the nation's infrastructure and sustain communities through their labour, have long been marginalised by rigid financial systems. Yet, their contributions are undeniable: small and medium enterprises (SMMEs), many led by artisans, fuel over 30% of the country's GDP and 60% of its employment. IMARA's launch boldly confronts this contradiction, channeling innovative solutions to unleash the untapped potential of those who power South Africa's growth from the ground up. Seth Mulli, programme director at Allan Gray Makers, captures this vision: 'Artisans don't just build homes and roads, they build dreams. But when denied fair access to capital, their impact remains shackled. IMARA isn't merely financing tools; we're financing dignity. Every rand invested becomes a brick in South Africa's foundation of inclusive growth.' Echoing this sentiment, Gladwyn Leeuw, CEO of E Squared Investments, adds: 'This is a transformative moment in unlocking the untapped potential of South Africa's artisan entrepreneurs. This initiative will empower thousands of artisans, creating a ripple effect of prosperity that extends far beyond the businesses themselves, strengthening communities and driving national progress.' The fund introduces South Africa's first financing model tailored to artisans' unique challenges: - Asset Rentals: Partnerships with leading Building Supply Retailers will enable SMMEs to rent essential tools and equipment without upfront cash requirements. - Material Financing: Artisan entrepreneurs can access materials needed for projects through channel partners without immediate payment obligations. - Invoice Discounting: SMMEs will receive liquidity immediately after completing projects instead of waiting 45-90 days for payment from clients. IMARA invites investors to amplify its reach. Returns here transcend financial metrics: For every R1 invested, IMARA projects R8 in social value through jobs created, skills honed, and communities revitalised. The fund is now stewarded by Setana Capital, a specialist in impact-driven portfolios, to ensure this dual mandate of profit and purpose delivers measurable change. About Allan Gray Makers: Allan Gray Makers, a programme of Allan & Gill Gray Philanthropies is committed to transforming South Africa's technical and vocational trades through entrepreneurial education. By 2035, Allan Gray Makers aims to have supported 10,000 to 20,000 artisanal enterprises, resulting in 300 000 income earning opportunities impacting one million lives in their households. About E Squared Investments: E Squared is a South African Impact Investor that provides funding and end-to-end business support to high-growth businesses, early-stage founders and social enterprises that create youth entrepreneurship opportunities.
Zawya
25-02-2025
- Business
- Zawya
South Africa: SACP rejects proposed VAT hike, urges tax system overhaul
The South African Communist Party (SACP) has fully backed SARS commissioner Edward Kieswetter's proposal for National Treasury to invest in SARS to recover an estimated R800bn in uncollected revenue, rather than raising taxes. Their support was confirmed at the party's Political Bureau meeting over the weekend, amid public outrage over proposed tax hikes, including a significant VAT increase, which contributed to the unprecedented delay of the Budget Speech. The party said alternatives to a VAT increase should include stricter capital regulation, tackling illicit financial flows, and addressing tax avoidance by multinationals and offshore-listed firms. Progressive taxes, such as a capital transactions tax and wealth tax, should be implemented. Proposed tax reform solutions Kieswetter recently highlighted that the 2018 VAT increase did not significantly boost revenue, suggesting that enhancing SARS's capacity would improve tax compliance and broaden the tax base. He noted that the uncollected taxes include approximately R450bn identified through theoretical modeling and over R300bn from outstanding tax returns. In a statement, the SACP noted that corporate income tax rates have been drastically slashed since 1994, leading to a sharp decline in their contribution to national tax revenue, far outweighed by the disproportionate contributions of VAT and personal income tax. "As part of a comprehensive fiscal overhaul, the most recent 1% reduction in corporate income tax should be reversed to restore much-needed resources to the national fiscus," it said. To this end, a KPMG report shows that South Africa's corporate income tax (CIT) rate has decreased from approximately 50% in the early 1990s to 27% in 2022. The most recent reduction, from 28% to 27% in 2022, was implemented to enhance the country's competitiveness and attract investment. Call for corporate tax reversal Due to the proposed VAT increase, the SACP Political Bureau has called for an urgent consultative process within the Alliance and tasked the Party's Secretariat with taking immediate leadership in implementing this initiative. (The Party had already rejected the budget on Monday, 17 February 2025 – two days before its scheduled presentation.) "The SACP categorically opposes the adoption of regressive taxation measures, such as a VAT hike, and the defunding of key pro-poor programmes. A VAT increase, much like cutting funding for essential social services, will only serve to further impoverish the working class and marginalised communities, while shielding the rich and their wealth. This is not merely unfair – it is a direct attack on social equity and justice," it said. The SACP reiterated its demand for a national budget that prioritises the implementation of the National Health Insurance (NHI) and facilitates a transition to a universal basic income grant for all South Africans. Furthermore, the SACP urges the government to urgently recapitalise and revitalise state-owned enterprises, reversing the harm caused by neoliberal policies. "We call for reversing the damage to governance and management due to state capture, and stress that the delayed funding of these enterprises should not be viewed as 'bailouts'," it said. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
