Sequel to Long Walk to Freedom - Revision 3 - Chapter 9 Page 5

Tax reduction over the past five years put R33 billion back into the pockets of individuals. Corporate income tax has been significantly reduced. Despite cutting taxes, both personal and corporate, and virtually eliminating fiscal drag, the South African Revenue Services has consistently exceeded the stringent targets set for total revenue collection. This has been achieved by improved infrastructure, smarter methods of work, better systems and enforcement, as well as recognition by the taxpaying population that everyone has a responsibility to pay their fair share. Foreign investor confidence has improved markedly as a result of the government's commitment to macro-economic discipline. In the year 2000 alone, the turnover in the bond market rose to a record R10,5 trillion and a record turnover in shares of R537 billion. Debt service costs rose during the 1990s from 15% to over 20% of the budget in 1998/9. This steadily eroded the resources available for delivery of services, for instance the amount spent on servicing debt was roughly equal to the amount spent on education, the greatest expenditure items on the budget. This trend has been reversed and it is expected that by 2002/3 debt service costs will fall to 4,4% of GDP, releasing an additional R10bn to spend on services. By 2005, it is estimated that interest on debt will be reduced to 16,4% of consolidated spending. 19