Overview
In the October 2024 medium-term budget policy statement, the Finance Minister noted that government debt was projected to exceed R6 billion, or 75.5% of GDP, by 2025/26. He further highlighted that this debt is currently “the largest component of spending and rising faster than economic growth.” At the same time, the Honourable Minister acknowledged that tax collections for the year were approximately R22 billion below the February 2024 budget target.
In this context of high government debt, constrained economic growth, limited investment, and uncertain tax collections, a critical question for the 2025 Budget Speech is: What actions will be proposed to ensure fiscal sustainability in South Africa?
A clear plan is needed to address the rising debt, especially if tax collections fail to improve. However, how can tax revenue be increased in an already high-tax environment? While government expenditure must be carefully managed, it is essential to maintain critical services and ensure infrastructure is appropriately funded and developed.
This balancing act demands prudence and decisive action. It will be vital for the Finance Minister to deliver clear and actionable policy statements in February 2025.
How will these developments impact your personal finances, your business, and your clients? What proactive planning can be undertaken amidst this uncertainty?
Join economic and tax experts, Dr Roelof Botha and Prof Jackie Arendse, for an in-depth analysis of the Finance Minister’s announcements. This webinar is essential for tax and accounting professionals seeking a practical understanding of the Budget Speech’s implications.
After attending watching this video, you will be able to: