Major changes are likely to be introduced in retirement funding, scrapping many of the tax anomalies that have built up over the years, as a result of the government-sponsored national retirement forum.
At a report-back meeting this week of forum committees, significant recommendations were made that could see tax favouritism between defined contribution and defined benefit funds being removed as well as the far better tax breaks being given to civil servants.
But whatever announcements are made in the Budget on retirement policy or tax issues in general, they are unlikely to be either sweeping or surprising.
If any of the latest Katz Commission proposals are adopted in the current Budget, it is most likely to be those relating to a capital transfer tax.
This could affect, for example, the threshold at which you pay estate duty - currently at R1 million - and the rate of estate and donations tax. Proposals along these lines have been expected for over a year.
On retirement issues, the working committees set up by the National Retirement Consultative Forum (NRCF), the public discussion group initiated by the Department of Finance, only reported back last Tuesday.
Gill Marcus, Deputy Minister of Finance, said after the forum that the government "may or may not" act on some of the issues raised.
During her speech to delegates she said Government could act on some issues, but others needed further discussion and proposals could possibly be circulated in the form of a Green Paper later this year.
Judge DA Melamet, who chaired the co-ordinating committee that examined the work of the five theme committees, said the co-ordinating committee reached consensus on only a few issues.
It agreed on the need for the retention of a social security system, for a single tax vehicle, a single supervisory authority, and that everyone should be encouraged to provide for retirement.
Marcus told the NRCF there were still several areas that needed to be considered in discussing a national retirement policy:
* Gender sensitivity. A number of retirement issues had a serious impact on women;
* The developing nature of South African society;
* How the retirement industry deals with poverty; and,
* Education. This was critical to address issues such as the preservation of retirement benefits into retirement.
Further work needed to be done on issues such as compulsory retirement provision and preservation, incentives for low-income earners and whether vehicles should be introduced to build up savings.
There were a number of loopholes which encouraged people to take actions to avoid tax, such as moving from pension to provident funds. It was government's responsibility to eliminate loopholes and areas of overlap, Marcus said.
But she said a number of areas in the discussion document showed progress was made. There was agreement on the need for equalisation of tax treatment between public and private sector retirement funds. There had to be a clear statement on what was meant by "accrued rights".
As far as the public service was concerned, there was a mandate for government and the centralised bargaining forum to discuss the Government Employees' Pension Fund's financing, structuring and investment policies.
Marcus said she would welcome further comments on the documentation put out by the various theme committees. The technical committee would consider comments and report back to government. "But I am not saying here that there is anything that will or will not be included in the Budget," she added.
The technical committee would have to consider what legislation was needed, and whether it could be drafted in the current session.
Proposals would have to be put to the cabinet and co-ordinated with the SA Revenue Services.
Marcus said she was determined not to create additional vehicles to do the same work that government departments are already being paid to do.
But the resources of the private sector would be drawn upon as needed.