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Parliament Debates 2022 Fiscal Framework and Revenue Proposals

March 11, 2022

National Treasury

Work is underway to review the grants system focused on developing an optimal support mechanism for grants recipients.

The finance minister, Enoch Godongwana, confirmed this in parliament during a debate on the 2022 Fiscal Framework and Revenue Proposals.

The minister added that the review will also inform government’s approach to long term social security for South Africa.

This includes considering social assistance, social insurance and active labour policies and artisan training for learners exiting vocational training.

Government plans to engage with the private sector, municipalities and state-owned enterprises to equip learners at TVET colleges with industry experience to facilitate gainful employment.

Other developments highlighted by the minister include:

• The need to act with speed to accelerate the pace of inclusive economic growth and job creation – must shape all macro and micro economic policies and interventions – sustained economic growth is necessary for South Africa to reduce unemployment, poverty and inequality;
• The need to urgently deepen social compacting and broaden consensus on the steps needed to improve the economy;
• The need to continue with the reform agenda in energy, telecommunications, rail, ports and water and sanitation, as well as in boosting tourism and attracting rare skills into the local economy.
• Public Sector Labour Summit scheduled for the end of March 2022 – important opportunity for all stakeholders to engage honestly and transparently and chart a path towards a more sustainable public service and remuneration guidelines.

In terms of recent global developments, the minister emphasised that the conflict between Russia and Ukraine will have an impact on the local economy.

“This conflict carries with it significant risks for a world economy that is yet to fully recover from the shock of the COVID-19 pandemic”, he said.

The minister added that the “longer the conflict lasts as well as the imposition of further sanctions could lead to widespread global inflation and impede global economic recovery”.

“On the positive side, we expect that the rally in export commodity prices, stemming from supply concerns brought about by the conflict, will provide added support to the local mining sector and
a possible windfall to revenue collections. However, the rising oil price, the potential weakening of the rand against the US dollar, and supply constraints around wheat, pose upside risks to food and headline inflation”, he said.

Meanwhile, speaking at a recent standing committee on public accounts meeting on blacklisting companies, the deputy minister of finance, David Masondo, stressed that failure to pay in 30 days creates cash-flow problems leading to companies failing to efficiently provide goods and services to the state.

“In this regard, we need to craft regulations that punish accounting officers who fail to pay companies within 30 days”, he said.

In a separate matter, the South African Revenue Service has, in Government Gazette 46015, published the rate per kilometre for motor vehicles in terms of Section 8(1)(b)(ii) and (iii) of the Income Tax Act.

The rate is set at 418 cents per kilometre and applies to years of assessment commencing on or after 1 March 2022.