In the usual pre-Budget anxiety, some concern has been raised that next week's Budget could see the introduction of taxes by the provinces.
The anxiety has obviously been fuelled by complaints by some of the provinces that they were experiencing a major cash crunch, reinforced by their failure to provide certain essential services.
Taxpayers are obviously nervous that provincial levies could be added to the taxes they already pay.
Marius van Blerck, a tax expert and member of the Financial and Fiscal Commission (FFC), says the Constitution provides for provinces to impose a flat rate surcharge on a restricted range of national taxes, including income taxes.
Murphy Morobe, who chairs the FFC, says provincial taxes are unlikely to be introduced in next week's Budget because the matter is still under investigation. The FFC made a proposal on the subject which was discussed at the Budget Council meeting last May, and it was decided that a number of issues needed further consideration, particularly the economic implications of the surcharge.
A report on provincial taxes from the Katz Committee is expected in the first half of this year, and van Blerck says it is unlikely the government will take any steps before this report has been released.
Morobe says the proposal put forward by the FFC had taken into account the government's existing policy of a tax to gross domestic product ratio of about 25 percent. For the surcharge to work would require national government to vacate some tax space to create what the FFC calls "tax room" for provinces to be able to levy their own surcharges without increasing the overall tax burdens on citizens.
Van Blerck says the FFC suggested that the national personal income tax rate be reduced to accommodate the provincial surcharges.
The FFC recommended that the SA Revenue Service (SARS) should administer the surcharge on behalf of the provinces, rather than their setting up their own tax-collecting agencies. Morobe says there is already draft legislation in the pipeline to give SARS the legal backing to do this. He agrees that SARS would be faced with additional responsibilities, but argues that this is a challenge, not a reason for not providing the service.
Beric Croome, tax partner at Kessel Feinstein, says another reason why provincial taxes are unlikely to be introduced in this Budget is that SARS is busy overhauling its computer system which is likely to restrict its ability to handle the additional administrative task of provincial tax collection in the near future.