THE BUDGET: What Business Wants
Recent Western Cape Business News
THE Cape Chamber of Commerce and Industry says it would like to see further action in the Budget to reduce administered prices which have became a form of stealth tax in South Africa.
“We were delighted by President Zuma’s promise in his State of the Nation address to reduce port tariffs for exporters, but we would like to see similar action on some of the other administered tariffs such as airport charges and toll roads,” said Mr Michael Bagraim, President of the Chamber.
In many cases user charges were not only a form of tax but they added to costs as were an inefficient way of collecting money. “The toll roads are an excellent example. The cost of collecting a fuel levy through the Revenue Service is about one percent of the sum collected but the cost of collecting money through the controversial E-tolling system has been estimated to at 35 percent.”
Toll roads had become a huge problem and he hoped there would be an indication from the Minister of Finance on how the Government was going to deal with the issue.
He said the Chamber supported the concentration on infrastructure development and hoped there would be more details in the Budget on projects for the Western Cape. “In particular we would like to see the development of the port of Saldanha and the planned IDZ as this project has great job creation and economic growth potential.”
Also vital was dealing with the bottlenecks in the economy. “The main one is electricity which is essential for economic growth. When we read that power is still being rationed to industry and that a firm like Xstrata is closing down its manganese furnaces for months to help Eskom we become very concerned. We need more electricity if we are to have economic growth and we cannot wait for Nuclear power stations as it will be at least 10 years before they produce any power.”
Mr Bagraim said the other great concern was the growing public service wage bill. Public servants were paid from taxes generated by business and, because of world economic problems and other issues, the private sector was shrinking. Salaries in the public sector were now higher than in the private sector and the situation was becoming unsustainable. “We need to see some corrective action and we are hoping that there will be signs of it in Mr Gordhan’s Budget,” Mr Bagraim said.
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