Revenue collection from individuals and tax is up, exceeding February’s projections.
Better-than-expected revenue collection from companies and individuals has boosted South Africa’s public finances, with the gross tax revenue estimate revised up by R83.5-billion, to R1.68-trillion.
Finance Minister Enoch Godongwana released the Medium-Term Budget Policy Statement (MTBPS) speech on Wednesday, 26 October at Cape Town’s City Hall.
He said improved revenue collection has not only bolstered the government’s cash position in the short term, but also helped it narrow the deficit and mitigate against lingering and new risks.
Most of this tax windfall is expected to fall away over the next two years. As such, the government says it will not rely on “transitory” revenue gains to fund permanent spending hikes; rather, it will use them to reduce risks and contingent liabilities.
Key concerns for the Finance Ministry are the country’s debt burden and debt-servicing costs: Godongwana says adopting a prudent approach to reducing debt will help stabilise public finances and reduce fiscal risks.
On revenue collection, Godongwana said gross tax revenue is now estimated to be R92.6-billion higher over the 2022 medium-term expenditure framework (MTEF) period compared to estimates presented in his February 2022 Budget, but it’s a projection…