I hope that, despite the current deficit the government is running, they don’t decide to increase personal taxes in this year’s budget.  I think that our personal tax rate, as well as business tax rates in South Africa, are generally higher than a lot of countries, and we have to be careful not to push those up too much.  

One has to plug the gap somewhere and the strikes have certainly cost the government revenue in terms of taxes in the mining sector and the continuous Eskom power failures will have the same effect on the profits of many companies, and as a result the taxes they pay.  The money must be found somewhere and I think the areas where we could perhaps tax a little bit more heavily is on estate duty – one’s estate pays a relative low estate duty in South Africa, compared to the UK and USA, when one dies, and there is certainly room for that to be increased.  The tax that is reputed to be the hardest to avoid and is the most efficient for collecting is VAT and as a result I think it would make sense to increase VAT.  Normally governments are scared to do that because the trade unions get hysterical and they feel that VAT targets the poor.  

VAT targets everybody, but the wealthy will still end up paying more VAT, because they spend far more.  Another tax, which is often forgotten about, and the time for government this year is absolutely perfect, is to build it into the petrol price.  The timing is perfect because we got used to pay R14,00 a litre for petrol and now we have slid down dramatically from that point and so there may well be room for government to add another 50c of tax onto the petrol price, especially if they see further decreases in the months ahead.  So, I would keep income tax just as it is and I would target estate duty, VAT (the UK is at 20%) and the petrol price.  It has to come from somewhere – what are your suggestions – apart from government stopping wasteful expenditure?