Hon Chairperson, hon members, Minister and Deputy Minister, Treasury family present here, and representatives from the SA Revenue Service, Sars, let me say that throughout the world, large and small economies, and big and small countries have come to realise that taxation or revenue collection is the key and critical element that determines the independence or sovereignty of every state because it is through the budget that the aspirations of every citizen can be realised. Therefore, the budget, as always, is nothing but an expression of a political will and commitment to address the challenges of society at hand. It is through taxes that governments are able to meet their core objectives and promote the welfare of each nation.
It is therefore not surprising that changes to the taxation laws are an integral part of the budget proposals presented in this House at the end of every financial year. The Taxation Laws Amendment Bill was tabled during a very difficult economic period internationally, characterised by uncertainty in the European economies and slow economic recovery in the United States.
As I speak today, the situation remains even more precarious and complex, particularly in what has become known as the Eurozone, and should these challenges persist, the projections in the Medium-Term Budget Policy Statement and the fiscal framework may be seriously impacted upon. Therefore our projected growth, revenue collections, and the economic functioning of our country generally may experience serious setbacks. This will have negative consequences and a negative bearing on our ability to bear and meet our targeted revenue expectations. It is here, hon members, that we should implore National Treasury and Sars, in particular, to take note of the recent comments and economic growth projections by the Reserve Bank, which further suggests that we may not meet the set objectives presented in the Medium-Term Budget Policy Statement and the general economic outlook.
Let me take this opportunity to welcome the positive assessment of our economic policies by the IMF Article IV Report, as reported in today's Business Day. What is of critical importance about this report is that it confirms the appropriateness of our countercyclical fiscal policies and approach and the monetary stance that the Reserve Bank in particular has taken around inflation targeting.
Furthermore, we should welcome the reaffirmation by the same institution that South Africa is both politically and economically stable and therefore - like our counterparts and sister nations in Brazil, Russia, India, and China in Brics - we pose no economic threat in the global economic environment. This is in direct contrast to the view of the international rating agency, Moody's, which perceives South Africa as politically unstable. We concur fully with their observation that the greatest threat to our economic stability is more from external shocks or economic challenges, and therefore we need to develop a comprehensive response to deal with the external shocks - or what is commonly known in economics as exogenous factors - in our economy.
The Article IV Report confirms what we've always believed, in that it says the challenges we face as South Africa, in the main, have very little to do with our ability to manage our internal affairs but much with what the developed economies or developed countries failed to manage in their own areas.
The Taxation Laws Amendment Bill before us introduces significant changes and new measures to address quite a number of issues, among others, broadening the tax base in support of inclusive growth; raising sufficient revenue to finance government programmes and projects; providing tax relief for individuals; tax breaks to support employment creation and skills development; closure of tax loopholes to sustain a broad tax base; and the introduction of significant changes that require companies to pay more attention to matters at board level.
Hon members, I wish to repeat the words of Sheldon Cohen, a former Commissioner of the American Internal Revenue Services, when he said that:
People think that taxation was a terribly mundane subject. But what makes it fascinating is that taxation, in reality, is life. If you know the position a person takes on taxes, you can tell their whole philosophy. The tax code, once you get to know it, embodies all the essence of life: greed, politics, goodness, charity. Everything's in there. That's why it's so hard to get a simplified tax code. Life just isn't simple ...
Now that we understand the importance of taxation in our lives and are probably less understanding of the pain of not being able to pay tax, I think the time has come to embrace the spirit of Lord Thomas Dewar, a Scottish whisky distiller, who said, "The only thing that hurts more than paying an income tax is not having to pay an income tax." What he means by this is that there's no pain worse than being unable to pay your taxes because you are economically inactive or underemployed, and therefore your human dignity is completely exorcised.
So, hon members, the amending Bill enjoins us in our private and collective being as companies and individuals to support the initiatives by National Treasury and Sars, in particular, to contribute towards the betterment of our fellow countrymen and women.
What Sheldon Cohen once said - that it is hard to get a simplified tax code because life is not simple - is also true of the administration and implementation of tax laws. This is a question that Sars in particular must continue to reflect on. Hon members, it is important to highlight that public interest and participation in tax matters still remain the province of the few. This is a clear reflection that the economy is not yet fully integrated and shared by all in this country.
In our public hearings, many of the biggest concerns raised were regarding section 45, which affects mostly businesses. As a committee, we congratulate National Treasury and Sars, in particular, for their willingness to engage openly with affected parties to find an amicable resolution to the challenges raised during our public hearings. This spirit should remain and it should continue to be the bedrock to resolve the remaining challenges that may be encountered by companies as we move forward during the administration of this Act.
In conclusion, the committee noted that the Taxation Laws Amendment Bill provides, among others, a good basis for the following: personal income tax relief; third rebate for aged individuals over the age of 75; and an increase in the turnover tax exemption threshold for microbusinesses. This will help us to respond to the challenges of the creation of new firms and new jobs in the economy, South Africa's role in regional economic integration, and the new anti-avoidance tax.
It is important to acknowledge and appreciate the success stories of Sars under the leadership of Ntate Oupa Magashule, together with his team, and, of course, under the tutelage and guidance of the Minister of Finance and his deputy. Most importantly, let me take this opportunity to thank the committee members for their dedication and the speed with which they have handled matters before the committee.
Hon members, as the ANC, we are convinced and confident that this taxation Bill will support the programmes that have been espoused and reflected in our various election manifestos, both in local and national government. As I leave this podium, I wish to remind hon members of what Benjamin Franklin said on tax matters:
Friends and neighbours complain that taxes are indeed very heavy, and if those laid on by the government were the only ones we had to pay, we might the more easily discharge them; but we have many others, and much more grievous to some of us. We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly.
I thank you. [Applause.]