Lots of politics in tax policy

TREASURY: OPPOSITION VOICES NOW LOUDER

- Amanda Visser

Uncertainty created by the new budgetary environment is as nerve-wracking for National Treasury as it is for the country. The value-added tax (VAT) increase is a highly contentious issue, and a lot of politics is playing out in tax policy.

Previous finance ministers had a lot of sway in terms of what they wanted to do and did not want to do when it came to the annual budget. However, opposition voices are now getting louder, says Chris Axelson, acting head of tax and financial sector policy at National Treasury.

"We must try to get to some agreement and hopefully this budget can get passed in the next few weeks," he says.

Given the parliamentary process that must be followed, there is the risk that it may not happen as soon as that.

Axelson says everybody, including Treasury, is new to this situation. "I worry a little that it is almost too political, and one might not get to the best outcome.