On 27 February 2024, Tax Consulting hosted the 20th session on the Budget 2024/25 update. These sessions equip the attendees with the “consequences” of the budget for tax practitioners, accountants, payroll professionals and other professionals, who are tasked with practical implications of the announcements made. By demand, the same session will be held next week.
The following highlights from the presentation and interactive polls, is indicative of how professionals view the budget.
1. Professional Rating of the Budget Speech
Attendees collectively rated Minister Enoch Godongwana's budget speech between 3/10 and 5/10. The prevailing sentiment was that the speech resembled a "typical election budget" aiming to appease various stakeholders with deferred consequences. There were only two attendees from close to a thousand attendees who gave a 9/10, and they were not government officials.
2. Gender Pay Disparity Revealed
A significant point of interest was the statistics which Jerry Botha from Tax Consulting shared on the gender pay gap. He noted that this slide alone contains data which justifies a whole presentation. The good news is that women are catching up with men, and at certain levels now outearn men. However, at the highest levels, the gap remains material and men far outweigh women.
Attendees expressed concern over the glaring gender pay gap revealed by these figures, indicating a pressing need for efforts to address equal pay for women in South Africa. The data provided a sobering glimpse into the reality of wage inequality in the country.
3. Utilization of Gold and Foreign Exchange Reserves
The announcement of the government's plan to draw down R150-billion from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA) sparked discussions about fiscal strategy. This unprecedented move, aimed at reducing borrowing and debt-service costs, raised questions about its long-term implications and sustainability. Tax Consulting is concerned about why this was not done earlier, if it indeed has very little fiscal impact. It is interesting to note that both SP and Fitch also subsequently expressed concern about certain aspects of the Speech.
4. SARS is Effective
The effectiveness of SARS, with a close ally in National Treasury, and being probably the best run government department was discussed, specifically the data which backs this statement as well as case law and various initiatives were discussed which is going to streamline collection. Near top of this list is monthly PAYE recon being implemented as well as how SARS makes it near impossible for those with “unclean” money to actually use their money.
5. Impact of Bracket Creep on Individuals
The concept of bracket creep, exacerbated by static tax tables, rebates and medical aid credits, emerged as a significant concern for individuals. With inflationary adjustments to tax brackets absent from this year's budget, attendees expressed apprehension about the potential financial strain on taxpayers. Tanya Tosen provided detailed practical examples illustrating the impact of bracket creep resonated with attendees, prompting discussions on how to address this conundrum at both personal and organizational levels.
As we reflect on these key takeaways, it's evident that informed decision-making and strategic planning are essential in navigating the complexities of the fiscal landscape.
For those who missed the previous sessions, we invite you to join our final webinar on March 12th at 10am. This session will provide insights and developments from the 2024 budget speech, offering a valuable opportunity to stay informed and engaged in the ongoing discourse.
Join us as we continue to unravel the mysteries of fiscal policy and chart a course towards a more equitable and sustainable future.
Submitted by Tax Consulting SA