Here’s what is happening in and affecting South Africa today:
Coronavirus: Global Covid-19 infections have hit 44.1 million confirmed, with the death toll reaching 1,168,000. In South Africa, there have been 1,863 new cases, taking the total reported to 719,714. Deaths have reached 19,111 (a daily increase of 58), while recoveries have climbed to 648,654, leaving the country with a balance of 51,949 active cases.
- Budget reaction: Response to the MTBPS tabled yesterday has been mixed, with economists and analysts – while appreciating that things are tight – not really moved by finance minister Tito Mboweni’s plans to cut the public sector wage bill, with implementation again being the key detractor. The minister’s budget relies heavily on cutting government spending, with the wage bill in focus – however, with negotiations still to come, and a poor track record of success here, everyone is looking to implementation to make the numbers work. [EWN, 702, economists]
- Taxes: SARS commissioner Edward Kieswetter says that the revenue service will be focusing on boosting tax compliance and coming down hard on illicit traders in South Africa to help boost government’s revenue. The country’s finances are in dire straits, and tax hikes to plug the growing budget deficit are inevitable. Over the next 4 years, treasury aims to raise an additional R40 billion through taxes – but the challenge is also improving current tax collection. [ENCA]
- E-tolls: Civil group Outa is challenging the constitutionality of the newly adopted Aarto Bill, saying that it usurps power from provincial and local governments. The challenge comes as many groups raise concerns over steep fines attached to the non-payment of tolls in the bill, which is believed to be a way for government to finally force Gauteng motorists to pay for the rejected e-toll system. Outa is also challenging the electronic delivery of fines, which could incur further charges for drivers. [Moneyweb]
- Smoking: Health groups, with support from union federation Cosatu, are calling for taxes on cigarettes in South Africa to be doubled. This would be a source of tax revenue, while also discouraging smoking through higher prices, they argue. However, tobacco and trade groups have hit back at the suggestion, saying that it would undoubtedly lead to a loss of revenue and job losses – while also promoting the illicit trade of cigarettes, pushing smokers to the black market. Cosatu was criticised for supporting something that would kill jobs. [TimesLive]
- Markets: After the rand fell to R16.51/$ during the budget framework speech, the unit struggled to claw back all its lost ground as the greenback was gaining its own momentum. The dollar rallied to a one-week peak as news of Germany and France entering new lockdowns put the euro under pressure. On Thursday the rand is trading at R16.37 to the dollar, with a range of R16.20-R16.50 and an expectation of an increase in volatility as we head towards next week’s US elections. Other pairs start the day at R19.22 to the euro and R21.26 to the pound. [XE]