The Gauteng province will consider increasing taxes to raise extra funds if research shows this to be justified, the provincial treasury said in Pretoria on Tuesday.
Addressing the Gauteng legislature’s finance portfolio committee, Nomfundo Tshabalala, acting deputy director general, said greater revenue raising powers were needed in the province.
Currently only four percent of the budget was generated by the province, while 96% was provided by the national government.
She said more funds were needed to address the growing demands on provincial welfare.
She warned however that Gauteng’s citizens may be reaching their fiscal breaking point.
”Already they are paying approximately 24% of gross domestic product (GDP) while the international standard is 26% of GDP,” Tshabalala said.
She explained that research would be conducted over the next two years to determine if the two percent gap would be enough to make taxation worthwhile.
”We can’t over-tax people because it then becomes detrimental,” she said.
Under the provincial Tax Regulation Process Act, Gauteng may add surcharges to the cost of fuel and personal tax. These, she cautioned were already quite high.
The Gauteng department of education also asked for a revision of the provincial equitable share, stating that this had not been done since 1999.
The department said the number of pupils had grown by eight percent since 1999 but there had been no increase in funding.
This, said the department, had resulted in a decline in per capita spending, which in turn had led to an increasing gap between the demands on education and the ability to provide.
”Education is not where it should be and needs to be addressed,” the department said. – Sapa