This increase can be attributed in part to inflation, raises in civil servant wages, and an upsurge in spending on social grants. <\/p>\n\n\n\n
These escalations make up approximately a third of state expenditure, having risen by an average of two percentage points above the inflation rate annually over the past decade. <\/p>\n\n\n\n
Another worry is the country’s debt repayments, which consume a larger portion of South Africa’s budget each year. <\/p>\n\n\n\n
“We’re in a worse position because the debt situation has worsened and continues to worsen every day<\/strong>,” Roodt said.<\/p>\n\n\n\n Godongwana reiterated this sentiment in the 2024 Budget Speech tabled in February this year. He noted the budget deficit for 2023\/24 is estimated to worsen from 4.0% to 4.9% of GDP compared to just a year ago.<\/p>\n\n\n\n The higher budget deficit means that debt-service costs in 2023\/24 have been revised higher by an additional R15.7 billion to R356 billion.<\/p>\n\n\n\n Debt-service costs will absorb more than 20% of revenue, said Godongwana.<\/p>\n\n\n\n Taxpayers will not foot the bill <\/strong><\/p>\n\n\n\n Speaking to\u00a0SABC News<\/a>, Godongwana was asked whether South Africa has run out of money, and he said it’s wrong to say the country has.<\/p>\n\n\n\n He went on to say that South Africa would simply increase taxes if the country ran out of money.<\/p>\n\n\n\n \u201cNo government runs out of money when they can tax people any day<\/strong>,\u201d he said. \u201cIf we were running out of money, we would have increased taxes. We didn\u2019t do so because we are confident that we\u2019re not running out of money.\u201d<\/p>\n\n\n\n However, both Roodt and PwC tax partner Professor Osman Mollagee said that Godongwana’s inelegant solution would be a very bad idea.<\/p>\n\n\n\n Based on data compiled from the National Treasury, South Africa’s tax base has grown by less than 16% over the past decade, while revenue from personal income tax has more than doubled<\/strong>.<\/p>\n\n\n\n Although the number of personal income taxpayers increased, the total number of registered taxpayers decreased by almost 7% between 2014 and 2024. <\/p>\n\n\n\n It’s worth noting that the government’s personal income tax revenue has increased by 109% over the same period, outpacing inflation by 48.4%<\/strong>.<\/p>\n\n\n\n The South African government is challenged to generate more revenue from a stagnant tax base.<\/p>\n\n\n\n Roodt agreed with Mollagee and added that increasing taxes is not feasible, as rich people and companies will leave the country if it happens\u2014which they are already doing<\/a>.<\/p>\n\n\n\n
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