Gigaba urges SA to pay tax ‘to fund’ democracy

Atul Gupta with President Jacob Zuma, Hassan Howa and Malusi Gigaba. BizNews

South African Finance Minister Malusi Gigaba has urged South Africans to pay their taxes, but he also pledges that government must be fair and manage public finances prudently. The Cape Messenger reports on Gigaba who spoke at a Tax Indaba in Johannesburg.

Citizens fund democratic governments by paying tax to enable the state to provide public services. The government must collect tax fairly and progressively.

In return for citizens placing their taxes and trust in government “bears the responsibility to manage public finances prudently and effectively”.

“Sometimes we take it for granted that more than 26 percent of South Africans pay their taxes. They help to ensure the sovereignty of our country. (They help) to ensure that our country relies on its own people to fund its fiscus… which guarantees us our sovereignty… especially in the global economic arena.”

Finance Minister Malusi Gigaba, speaking at the SA Institute of Tax Practitioners’ Tax Indaba, expressed his optimism that GDP growth would be reasonable in the months ahead.

GDP had rebounded. “GDP growth rebounded in the second quarter in 2017 following two periods of contraction.”

GDP had grown by 2.5% on a quarter on quarter basis. “On a year by year basis, it grew by 1.1% in quarter two.”

A sectoral analysis in quarter one indicated “worrying” broad-based weakness in the industrial and services sectors, the latter having been the mainstay for growth in recent years.

“The improvement in the second quarter is encouraging as all sectors except construction and government services improved.”

Although the Medium Term Budget Policy projections for 1.3% growth remained at risk, “we are increasingly optimistic that reasonable GDP performance may materialise in the coming quarters”.

Household consumption had been the largest contributor to growth in the second quarter of this year “growing 4.7% quarter by quarter”.

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