BoB weighs in on tax debate
Mbongeni Mguni | Friday December 13, 2019 13:40
The Finance and Economic Development ministry is proposing broad tax reviews as part of measures to restore fiscal stability in NDP 11, which is due to suffer P18 billion in budget deficits. “What government gives, it must first take from its citizens; that’s public finance 101,” BoB governor, Moses Pelaelo told BusinessWeek at a briefing last week. “It’s just like that.
“The issue of broadening the tax base and enhancing the efficiency of public finance management are critical. “When you have many exemptions and others, they may be distortionary and hamper the ability to collect tax efficiently. “We are all aligned on this, from the BoB, to government and others, looking at the situation.
“Everyone needs to be paying taxes instead of all of us depending on handouts.” BoB Director of Research and Financial Stability, Tshokologo Kganetsano said the central bank had previously detailed its advice on the matter, noting the declining revenues and mineral receipts. “We gave the example of unused pieces of land that if government were to tax these, it would encourage owners to use them productively or lease them to those who can. “What government is considering in terms of taxes and others is in line with our thinking.
“It is also in line with the IMF whose recent consultations and report here and point in the same direction with similar recommendations.”
Government’s other considerations include rationalising the civil service and numerous measures to tighten public finance management, including enhancing the crackdown on corruption and wastage.