SAIPA unpacks National Budget Speech at review webinar

South African Institute of Professional Accountants
26 February 2021

SAIPA unpacks National Budget Speech at review webinar

The South African Institute of Professional Accountants (SAIPA) held its Budget Speech Review webinar on 25 February. The event comes hot on the heels of Finance Minister Tito Mboweni’s much-anticipated budget address delivered to the nation the previous afternoon.

“Our goal is not just to critique the speech but to inspire meaningful conversations around it between members of the accountancy community,” said Faith Ngwenya, Technical and Standards Executive at SAIPA.

The virtual breakfast engagement was held in place of the Institute’s annual Budget Breakfast due to the constraints of COVID-19, but continues to be presented in its traditional discussion panel format.

Speakers and presenters

Ngwenya hosted the 2.5 hour session while Ettiene Retief, Chairman of the National Tax and SARS Committee at SAIPA, facilitated the discussions.

Panellists included tax consultant and former SARS executive, Johann van Loggerenberg; Helena Strauss, a specialist in tax within the digitalised economy; Khaya Sithole, activist and lecturer at the University of KwaZulu-Natal; and Jashwin Baijoo, Legal Manager, Africa Tax and Compliance at Tax Consulting South Africa.

SAIPA members and guests participated through the virtual platform’s chat function.

Top takeaways

Although many key elements of the Budget Speech were analysed, the top takeaways arose from the technical and philosophical responses of the speakers and audience members alike.

Accountability was high on the agenda. This sentiment was summarised accurately by Ngwenya herself. “It is for everyone of us to make the change that we want to see. But we also expect the same from our government officials. We expect that they will tighten their belts, that they are going to be spending less,” she said, referring to the growing budget deficit.

The possibility of a third COVID wave derailing the budgetary plans was also raised. Khaya Sithole submitted that the country can only act on the plan it has and handle any further crisis as it arises. “What we need is a government that we can all have faith in and support in any unprecedented event,” he said, citing poor handling of the vaccine roll-out.

While Helena Strauss presented on the digitalisation of SARS and its adoption of technologies like AI and blockchain, the overarching theme emerged that SARS needed to build trust. If taxpayers see a system that is unbiased and taxes all South Africans fairly and equally, they will be more inclined to pay their fair share.

The topic of non-compliance among high-value individuals also arose throughout the session. This culminated in a discussion between Ettiene Retief and Jashwin Baijoo on the implementation of a wealth tax. Both agreed that there were clear signs that the National Treasury was busy doing the research for its eventual implementation, and SARS will focus on collecting the data required for this. However, there are many factors that impact the design of a wealth tax, such as the current capital gains and estate duty provisions.

The personal income tax rates will be linked to the tax base, and if the number of contributors to income tax and the amount to tax does not increase sufficiently, Government will have no option but to increase the tax burden for the current tax base. The high level of unemployment plans a significant role in this.

In closing, Retief elaborated on the value of the Budget Review and the conversations in helping the Professional Accountant (SA) to move forward and answer tough questions in a difficult economy. “Especially as advisors, we need to understand from a planning point of view how to address those issues properly,” he said.

Next event

SAIPA’s Budget Speech Review acts as a red carpet event leading to a more in-depth 4.5 hour webinar on the technical details and economic effects of Minister Mboweni’s announcements.

Link to the event recording

You can view the full recording of the Budget Review webinar here: https://vimeo.com/event/726114/videos/515679183/