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Budget 2023: Give tax relief where communities provide services themselves

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“Compensate communities for public services that we have to provide ourselves”. This is the message that Free State Agriculture (FSA) wants to convey to the Minister of Finance, Mr Enoch Godongwana, before the budget speech that takes place on 22 February 2023.

According to Mr Gernie Botha, chief executive officer of FSA, citizens are increasingly burdened, but the public service no longer fulfills its service delivery responsibilities.

“As a result, individuals and communities are forced on an almost daily basis to manage their own roads, water and sanitation and other services in order to survive. “For example, Free State farmers have already repaired numerous life-threatening roads themselves in 2022 and filled hundreds of potholes. Out of their own pockets.”

According to Botha, it therefore only makes logical sense for the government to accommodate communities, and especially farmers who usually step in, with options to be able to recover these expenses from taxes.

Free State Agriculture submitted budget proposals to the ministry early on. Core proposals include:

  1. Accept that where farmers repair the roads, they give up the diesel and expenses as farming expenses, they are deducted. If not, it must be a tax deductible expense.
  2. The same applies to crime and security expenses (if farmers do not already include them in farming expenses) – this must be a tax deductible expense.
  3. Permission to set up all their own renewable energy installations, deducting costs as farming expenses.
  4. Where farmers’ VAT and Income Tax returns are audited, refunds must be made as soon as possible, as this puts many farmers under serious cash flow pressure if delayed for months.

According to Botha, tax deductions for “do-it-yourself” service delivery actions will contribute to stopping and completely reversing the decay in the countryside. This will be a positive alternative for all communities to amongst other things, service delivery protests and relieve pressure on the weakened public service.

“With this year’s budget, Minister Godongwana therefore has an opportunity to empower the rural communities to stop the decline of the countryside themselves”, said Botha.