The University of Cape Town on Tuesday morning confirmed reports that “four cars were set alight at .
Those looking forward to an exciting budget or substantial tax relief for individuals when Finance Minister Trevor Manuel announces his 2007-08 budget on February 21 are likely to be disappointed, analysts predict.
While we go into this year's budget with significant revenue over-collections, analysts predict that taxpayers aren't likely to benefit much from this robust fiscal health.
In his Medium Term Budget Policy Statement (MTBPS) in November, Manuel unveiled R30billion in excess revenue collections, stemming largely from higher-than-expected corporate and individual tax receipts.
This, the government forecasts, will result in a budget deficit of only 0,4percent of gross domestic product (GDP) in the current financial year and an estimated surplus of 0,5percent of GDP next year.
Niel Raubenheimer, fiduciary specialist at BoE Private Clients, says that given the urgent need for further infrastructure and social spending, Manuel's budget is not likely to contain substantial tax cuts.
"Though we are expecting a nearly balanced budget for the 2006-07 financial year, or indeed a small surplus, any possible tax relief must be balanced against the need for substantial expenditure," he says.
"Housing continues to be a major issue, and the government also needs to show tangible results in the fight against crime. Both of these initiatives will require additional funding."
According to Raubenheimer, the country has virtually no surplus capacity for electricity generation to help Eskom, which appears to be almost in a crisis.
More public funds will also need to be dedicated to this because not all of the planned expansion in capacity can be funded by electricity users through increased tariffs.
Why Manuel would be mindful of a tax windfall to consumers, according to Raubenheimer, is the consideration of the current heady level of consumer spending.
"Looser fiscal policy in the form of personal tax cuts will add fuel to the fire and serve to counteract the tighter monetary policy the South African Reserve Bank has been implementing.
If there is some personal tax relief announced this month, he says, it will be targeted primarily at the poor and middle-income earners.
Last year personal tax relief totalled R13,5billion, which was largely made up of tax bracket adjustments.