South Africa must do more than target the wealthy to reduce its deficit
Pravin Gordhan's tax increase on high-income earners was a response to a growing budget deficit, declining revenue sources, and a limited pool of tax revenues. Finding the right balance of taxes for the budget 2017/18 proved to be a difficult task, according to Gordhan. South Africa has a deficit of R28 billion, which is the amount by which its expenditure plans exceed its revenues. The minister must find a way to close the gap in the next two years. Tax increases are the most reliable and obvious source of revenue for the government. Taxes had to be raised. The minister's tax tools...