South African finance minister to present 2021 budget to parliament
South African Finance Minister Tito Mboweni will deliver a speech today on the Treasury’s 2021 budget amid planned labour protests.
Today’s announcement is politically precarious for President Cyril Ramaphosa and his African National Congress party, which is attempting to resuscitate the nation’s economy without alienating constituents ahead of municipal elections to be held later this year. The government has already faced corruption accusations after failing to secure sufficient vaccine doses at reasonable prices even with a $26 billion COVID relief fund.
Today’s protests, deliberately timed to coincide with Mboweni’s speech, firmly oppose increases on income taxes as a means of financing budget shortfalls. Such a tax would overburden a labour market still experiencing suppressed wages and elevated unemployment—currently at 32.5%, the highest level since 2008. Critics argue the government should focus more on corporate taxes and cracking down on tax evasion. Alternative measures to increase tax receipts could include bolstering collection methods or revising tax reporting rules that apply to non-traditional roles, such as contractors or informal consultants. Expect the nation’s finances to remain unstable for the foreseeable future, with the need to take on more debt increasing in the short- to medium-term.
Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.
