Hon Chair, may I indicate that I may not read the entire statement but request that it be recorded in full in Hansard. The Rates and Monetary Amounts and Amendment of Revenue Laws Bill deals only with changes to the tax rate and monetary thresholds. As a result of those changes, this Bill provides an amendment to the Income Tax Act of 1962, in order to fix the rate of normal tax.
The Bill also provides amendments to the Customs and Excise Act of 1964 in order to amend the rates of the duty in Schedule 1 and to provide for matters connected therewith. The Select Committee on Finance, having considered the Rates and Monetary Amounts and Amendments of Revenue Laws Bill [B10 - 2012] referred to it and classified by the Joint Tagging Mechanism as a Section 77 Bill, recommends that the House, in terms of Section 75 (1) of the Constitution of the Republic of South Africa, approve the Bill without amendments. I so move.
Debate concluded.
Question put.
Declarations of vote:
Chair, there is no doubt that the Minister has managed, in large part, to walk the tightrope of opposing funding demands in a way that has, by and large, not given way to excessive demands for funds and a consequential uncontrollable budget deficit. There are, however, areas where the DA must express concern. These concerns are about the impact on the investment of capital in South Africa that will lead to economic growth and thus to job creation.
While concessions have been made in exempting certain entities, such as retirement funds and public benefit organisations, from dividends withholding tax, the increase from 10% to 15% for other entities will inhibit the investment of capital, both local and foreign.
The increased inclusion rate for capital gains tax is another blow for capital investment, economic growth and job creation. In a country where savings levels are dangerously low, we must make every effort to encourage and not discourage savings. The investment of capital and the successful and productive use thereof must be encouraged and rewarded.
There are dangers that lie ahead as the pressure grows for new or additional and costly taxes, such as e-toll, local business tax, a payroll tax and other increases in existing taxes. Our target must surely be a reduction in the tax burden that will result in increased capital investment, as well as a boom in small businesses. South Africans are already heavily taxed. An additional tax will simply push South Africans into being overtaxed.
The answer to our needs for poverty alleviation and additional revenue lies in economic growth and not in additional increased taxes. The DA has a plan to grow the economy by 8%. These will double the size of our economy - and thus our tax revenue - in 10 years. The DA supports the Bill.
Chair, the ANC believes that the 2012 tax proposals are meant to support a sustainable physical framework over the medium term, while facilitating economic growth and creating a more competitive economy. In meeting South Africa's developmental challenges, sufficient revenue is required to fund key expenditure priorities while ensuring that public debt and debt service costs are contained and avoiding the overburdening of taxpayers.
These reforms, in our view, will improve the fairness of the tax system and ensure that income from capital is taxed more appropriately. We further believe that government has considered all matters related to this particular matter and this will in no way affect our citizens in a negative way. We therefore support this amendment.
Bill accordingly agreed to in accordance with section 75 of the Constitution.