SAIPA professionals unpack the Minister of Finance's annual national budget speech.
On 24 February 2022, the South African Institute of Professional Accountants (SAIPA) held its annual Budget Breakfast at the aha Gateway Hotel conference venue in Durban.
Ettiene Retief, Chairman of SAIPA's National Tax and SARS Committee, hosted a panel of experts who reviewed Minister of Finance Enoch Godongwana's annual national budget speech, delivered less than a day earlier.
"As one of South Africa's leading accountancy bodies, it is tradition of us to bring thought leaders together to cast light on the deeper implications of the budgetary announcements," said Retief.
The event was SAIPA's first live gathering since Covid-19 hit South Africa early in 2020. This year also marks the Institute's 40th Anniversary.
Opening remarks
During her opening speech, SAIPA Chairman Kantha Naicker said that the body was a global, continental and national influencer with a 40-year track record of making a difference to economies. In light of the budget speech, it was obvious the Institute’s work in South Africa was far from over.
Before introducing the panel, Retief noted that the budget speech was upbeat and offered various welcome reliefs. However, provisions for funding economic growth and stimulus for certain sectors that are critical to the country's recovery were noticeably absent.
"More could have been done to focus on the growth of the economy and most of that comes from small-to-medium enterprises," he said.
Discussion highlights
The panel guests included Jashwin Baijoo, admitted attorney with the High Court and an expert in tax and international business law; Professor Dilip Garach, a chartered accountant and CEO of the Garach Group; Marcus Botha, Head of Corporate Tax at BDO Tax Services; and Dr Surendran Pillay, Senior Lecturer and Coordinator of Accounting Programs at the University of KwaZulu-Natal.
During the discussion, the panel highlighted various points of interest and took questions from the audience.
The main theme that emerged was that reliefs and incentives were short term solutions. It was more important to boost small business development and drive job creation. Support for education was therefore essential, and this trend should carry into entrepreneurship to empower young business people.
Botha stated that 50 cents out of every rand is going to social grants and paying off the national debt, with the rest of the group agreeing that this was unsustainable.
A further concern was the erosion of the tax base due to qualified professionals emigrating to greener pastures. This resulted not just in lost tax revenues but also skills and intelligence that supported economic growth.
The elephant in the room was state-owned enterprises (SOEs) with the panel favouring privatisation, either complete or with government shareholders retaining only a portion of the equity.
They also said better approaches were needed to perform lifestyle audits on high-value individuals to recover large sums of unpaid taxes faster.
Event close
The event’s main sponsor Sage then provided a comprehensive presentation on the changes encompassed in the budget speech.
In his closing remarks, Retief agreed with the Finance Minister that government does not create jobs, businesses do. "The takeaway today is that we have the responsibility to create opportunities and not depend on government to do it for us," he said.
