NEAL: LONG-TERM BENEFITS OF TAX-HEAVY BUDGET

MBABANE – The Minister of Finance, Neal Rijkenberg, has attempted to justify his tax-heavy budget.

The budget, which he presented on Wednesday, was viewed as one with minimum cuts and more taxes.
Rijkenberg conceded that the taxes would hit hard on the poor and in the same breath justified that in the long-term, it would benefit most of the unemployed, low income earners and the elderly.

This, he said, would have ripple effects on the civil servants who are currently aggrieved for not getting their cost-of-living adjustment (CoLA).
Awarded
The minister said despite that civil servants were not awarded CoLA, their burden of catering for those in the lower bracket of the economy would fall off.
In his explanation, Rijkenberg said the fuel tax and VAT on electricity would hit hard on the poor but government had devised means to compensate them. He said the minimum wage, which is soon to be introduced, would put something into the pockets of the low income earners.

It is anticipated that the minimum wage would be around E1 500, though the minister did not wish to commit on any figures. He could only state that it would be a substantial improvement to the E861 – which is currently the minimum wage.

Rijkenberg said the introduction of a minimum wage meant that those in the lower ranks of the economy would have something extra to spend.
“This will allow what they get to circulate at least three or four times in the economy – and government will get tax in that way.”

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