Chair, there is no doubt that the Minister has managed, in large part, to walk the tightrope of opposing funding demands in a way that has, by and large, not given way to excessive demands for funds and a consequential uncontrollable budget deficit. There are, however, areas where the DA must express concern. These concerns are about the impact on the investment of capital in South Africa that will lead to economic growth and thus to job creation.
While concessions have been made in exempting certain entities, such as retirement funds and public benefit organisations, from dividends withholding tax, the increase from 10% to 15% for other entities will inhibit the investment of capital, both local and foreign.
The increased inclusion rate for capital gains tax is another blow for capital investment, economic growth and job creation. In a country where savings levels are dangerously low, we must make every effort to encourage and not discourage savings. The investment of capital and the successful and productive use thereof must be encouraged and rewarded.
There are dangers that lie ahead as the pressure grows for new or additional and costly taxes, such as e-toll, local business tax, a payroll tax and other increases in existing taxes. Our target must surely be a reduction in the tax burden that will result in increased capital investment, as well as a boom in small businesses. South Africans are already heavily taxed. An additional tax will simply push South Africans into being overtaxed.
The answer to our needs for poverty alleviation and additional revenue lies in economic growth and not in additional increased taxes. The DA has a plan to grow the economy by 8%. These will double the size of our economy - and thus our tax revenue - in 10 years. The DA supports the Bill.