2.1 CHAMSA commends the Minister for his MTBPS and welcomes his efforts to foster and increase the overall level of business confidence. Business also recognises the formidable challenge that faces the government in its efforts to promote growth and to achieve a better distribution of wealth. The MTBPS must be seen as an instrument for securing those two objectives. At the same time the challenge has had to be met in the face of difficult global and domestic economic conditions. This is evident from the scaling down of growth for 2003 from the original forecast of 3,3% to 2,2%.

2.2 The initiatives outlined under the MTBPS for the enhancement of growth prospects may be distinguished between those of a cyclical nature and those of a long-term nature. The latter include: -

2.3 Business acknowledges the importance that the government attaches to the containment of inflation. It supports the decision to continue with efforts bring inflation down to within the 3%-6% target range. Hopefully this determination will be more forcibly reflected in the setting of future administered prices. Business does not support the arguments advanced for the raising of the inflation target range. Such a move would raise the level of uncertainty among both business and consumers, discourage investors, and prove counterproductive to sustained economic growth.

2.4 The general framework of the MTBPS is expansionary. On the expenditure side of the Budget, the MTBPS proposes a real increase of 5,7% (excludes interest payments) in 2004/5 and averaging 4,4% in subsequent years. This increase must be seen in the context of an overall economic growth rate of less than 4%. There is to be an increase in capital expenditure with the intention of bringing it up to a level of 6% per annum of GDP. The Budget deficit for the present Fiscal year is to increase from an estimated 2,4% to 2,6%. In 2004/5 the deficit is to rise to 3,2%, thereafter it is to decline to below 3%. To the extent that the increase forecast for next year is not to be a reversal of a downward trend but merely an adjustment for a cyclical problem, the increase above the 3% level is acceptable. However business would be concerned should the deficit be allowed to continue above the 3% level for any length of time.

2.5 In order to deliver basic services to poor communities, the MTBPS aims to provide a considerable increase in resources to local government. The effective implementation of the programme is to be governed under a new mechanism – Consolidated Municipal Infrastructure Grant. Given the fragile administrative capacity of many local governments, the success of this programme will be under scrutiny.

2.6 From what has been outlined in the MTBPS, scant mention is made of the government’s privatisation programme. Hopefully the strategy has not lost direction. CHAMSA declares that it is prepared to play a meaningful role in the furtherance of the strategy; after all business as a user of the services of state owned enterprises has as much of an interest in the delivery of their services as other parties to the process.

3.1 CHAMSA wishes it to be on record that it gives its unequivocal support to tax adherence. It also believes that in order to achieve that aim, the tax system itself must be supportive of such an aim. Furthermore, whilst it is the duty of the taxpayer to fulfill his/her tax obligations, it is also the duty of the taxpayer to secure his/her welfare through his/her own efforts. To that end, it is quite legitimate for the taxpayer to minimize his/her obligations within the ambit of the law.

3.2 It is claimed that the major tax reforms that have been introduced in recent years have broadened the tax base and placed tax policy on a ‘sound footing’. Whilst limited opportunity has been given to comment on much of this legislation, the reforms have brought with them an overwhelming degree of compliance complexity. The drafters of new tax legislation appear to give limited consideration to its practical implementation. Taxpayers have had to adapt, understand and comply with stringent, complex new laws. CHAMSA notes that it is the intention to allow for a ‘period of consolidation in the years ahead’.

3.3 CHAMSA fully supports the Foreign Exchange Control Amnesty as it provides a suitable inducement for those who have operated outside the Exchange Control laws in the past to regularise their offshore holdings. The Chamber welcomes the announcement that the cut-off deadline has been extended to 29 February 2004.

4.1 CHAMSA unashamedly adheres to the philosophy of the ‘market- driven’ economy. In that respect it believes that the market place must adhere to certain rules of conduct that encourages entrepreneurship and competition.

4.2 CHAMSA welcomes the intention to ‘improve’ the regulatory environment and overcome the obstacles that confront small business. As a general observation, business believes that legislators do not appear to consider the consequences of compliance in all of their legislative enactments. CHAMSA can only reiterate what has been said time and again that a business environment must be created that makes it is easy for business people – and small business in particular - to comply with the law. Laws that put the majority of business people outside its ambit are bad laws.