To tax lobola, or not to tax: that is the question that Finance Minister Trevor Manuel does not want to touch with a barge pole. He told MPs in his budget speech on Wednesday that last year he received a suggestion he should make lobola, the traditional payment for a bride, tax deductible.
”This year, I’ve been given a suggestion that I should impose VAT [value-added tax], or that I must tax lobola trusts, since some people are making money out of them,” he said. However, this issue seemed ”far too complex”, and he would have to consult ”our elders”.
”I don’t know that we can get involved in these matters through Sars [the South African Revenue Service],” he said.
He said the lobola tax proposal was one of hundreds of ”Tips for Trevor” he received ahead of the budget from members of the public. ”Let me thank all of those South Africans who have taken time and effort to write to me,” he said. ”The strength of our democracy is measured by the depth of involvement by ordinary people in the affairs that affect them.”
He said a Mr AS Smit submitted a tip that asked: ”Can you thank taxpayers in your Budget address for their contribution?”
”Mr Smit, you are completely correct, so I apologise if I have not done it adequately in the past, and express our joint gratitude to all taxpayers,” Manuel said.
Announcing a series of tax-relief measures for individual earners, he appealed to taxpayers to use the extra cash to settle debts or save, rather than for consumption.
”And the governor [of the Reserve Bank, Tito Mboweni] said if they don’t listen to my pleading, he’ll have to report them to the monetary policy committee,” he added.
The committee is the body that adjusts the rate at which the bank lends money to commercial banks, a figure that determines interest rates charged to customers in turn.
In another light moment, Manuel outlined how South Africa’s foreign reserves, ratio of public debt to GDP, and economic growth have improved dramatically since President Thabo Mbeki took office in 1999.
”However, Mr President, it’s not all smooth sailing. Can I point out that when you came to office, Bafana Bafana was ranked 25th in the world?” he said.
South Africa’s national men’s soccer team is currently ranked 59th out of 207 teams by Fifa. Last year in the African Nations Cup, they failed to score a single goal.
Later in his speech, Manuel announced that following discussions with Cricket SA, tax law is being changed to ease the tax liabilities of professional sport bodies ”that contribute meaningfully to the development of amateur sports”.
Since that discussion, he noted, the Proteas have risen to the top spot in the world one-day cricket rankings. ”I should just announce the same terms are likely to be
available to all codes,” he said. — Sapa