Finance Minister Enoch Godongwana said that he cannot rule out tax increases for 2024, as government is dealing with a huge budget shortfall. Picture via SAgovnews on X
Finance Minister Enoch Godongwana said that he cannot rule out tax increases for 2024, as government is dealing with a huge budget shortfall.
Godongwana is currently in Davos, Switzerland, as he is attending the World Economic Forum (WEF). He told the SABC that he cannot deny that tax increases are an option, but he did acknowledge that it would be a difficult exercise to undertake, given the current fiscal environment.
The minister also said that he was disappointed by the derailment of a coal train in KwaZulu-Natal. Two Transnet freight trains collided on the railway tracks in eLubana.
The impact of this collision on the mining sector of South Africa is unfortunate, according to Godongwana.
This is another blow to coal volumes and mining companies using the rail line. It should be noted that the industry has seen billions of rand lost in potential export revenue amid Transnet Freight Rail problems.
Earlier in the week, Godongwana said SA was committed to better structural reforms that would foster more economic growth and competitiveness.
Godongwana was speaking at a panel discussion at WEF.
“Structural reforms in SA are targeted at electricity, infrastructure, water, and logistics and are driven by Operation Vulindlela,” according to a statement by government.
“There are a number of things we are doing to deal with structural reforms,” Godongwana said, emphasising that energy reform was top of the agenda.
“A new challenge has been the logistics sector, where we are investing a lot in it. We have been trying to change the skill composition to the extent that we don’t have it, and we have provided an environment where we can import skills with ease,” he told delegates.
“So there are a lot of structural reforms that we have engaged in in order to make sure that we can grow the economy and be competitive.”
The South African Reserve Bank (SARB) Governor, Lesetja Kganyago told media outlets on Tuesday that he ruled out cutting interest rates, as inflation is still too prevalent in the country.
Kganyago was speaking to Bloomberg TV at WEF and noted that, while real rates are not as high as before, they are not where he wants them to be.
“Our real rates are not particularly high, and inflation has come down — it's within target — but it is not quite where we would like to see it,” Kganyago said.
“And if we are to make any policy adjustments, we would have to see that inflation has declined to our anchor, which is 4.5 percent.”
Kganyago also noted that he expected inflation to average 5% in 2024 and 4.5% in 2025.
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