Finance Minister Tito Mboweni has projected a R53 billion revenue collection shortfall for the current financial year.
According to the National Treasury’s budget review document, the bulk of the 2018/19 shortfall resulted from weaker-than-expected economic growth in 2019.
“We now expect to collect R1.37 trillion this year. This is R53 billion, or 4%, less than we expected.
“Looking ahead, our revenue forecasts are prudent. We assume an elasticity of one, which means a one-to‐one relationship between growth in taxes and economic growth, after adjusting for tax measures,” he said.
In 2018/19, government collected R57.3 billion less than projected in the 2018 Budget, and R14.5 billion less than set out in the 2019 Budget.
The 2018 revenue collection shortfall was the largest under-collection since 2009/10, following the global financial crisis.
It was partly driven by large and unexpected once-off payments of VAT refunds in line with commitments in the 2018 revenue collection.
Tabling the medium-term budget on Wednesday, Mboweni said to meet government’s fiscal needs, growth was not enough.
“We also need a well‐functioning and efficient revenue collection agency.
“The South African Revenue Service is emerging from its own winter.
“Cabinet has approved that we implement the findings of the Nugent Commission of Inquiry into Tax Administration and Governance, and I intend to table a bill early next year. The President has appointed Edward Kieswetter as the new Commissioner.”
Mboweni said since Kieswetter started work in May, he has already taken steps to re‐invigorate and re‐establish the Large Business Centre, and the litigation, integrity and compliance units.
Leadership, staffing and procurement failures are also being addressed.
He said to achieve a more inclusive South Africa, government relies on honest taxpayers. “Without your taxes, South Africa will never succeed. Thank you to all those who have honoured their obligations. But you have told us that we must spend your hard‐earned money better, and we could not agree more.
“Looking ahead, our revenue forecasts are prudent. We assume an elasticity of one, which means a one-to‐one relationship between growth in taxes and economic growth, after adjusting for tax measures,” he said. – SAnews.gov.za