Treasury straddling hiking taxes or borrowing money to grow SA: Godongwana

CAPE TOWN - Finance minister Enoch Godongwana has set a grim scene against which he is set to deliver the Medium-Term Budget Policy Statement in two weeks’ time.

He said National Treasury is facing difficult trade-offs of either hiking taxes or borrowing more money to fund the country. Godongwana was speaking during the National Treasury’s presentation of its annual report to Parliament’s finance committee on Tuesday morning.The minister defended government’s planned expenditure cuts ahead of the tabling of the MTBPS, saying the alternatives are less palatable.

"It’s difficult to raise taxes in year. The second issue is increasing the borrowing. As we will demonstrate, our borrowing costs and our borrowing levels are becoming high," said Godongwana.He mentioned that National Treasury had given careful consideration to how to meet the country’s budget deficit.

"Our approach has been moderate of combining expenditure cuts, but bump up some borrowing in a sustainable way," said Godongwana.

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