Johannesburg – The government has proposed tax increases of R5-billion in the next financial year through the improvement in revenue collection as part of the R400billion tax measures required over the next four years to shore up the fiscus.
Finance Minister Tito Mboweni yesterday tabled the Medium-Term Budget Policy Statement (MTBPS) in Parliament and it showed that the tax revenue shortfall for this year would in fact be worse than was initially projected.
The MTBPS revealed that the South African Revenue Service (SARS) would miss its revenue target by R312.8 billion this financial year due to the expected depressed performance of the major tax bases amid Covid-19 financial turmoil.
Sars collected a net amout of R1355.8billion, instead of the revised estimate of R1358.9billion in the 2019/20 financial year, resulting in a shortfall of R3.1billion.
The Budget documents revealed that tax revenue will decline by 17.9% this year, from R1425.4trillion to R1112.6trillion, on subdued gross domestic product (GDP) growth.
The tax-to-GDP ratio is also expected to decline substantially, dropping from 26.3% to 22.9%.
The minister thus revised down South Africa’s gross tax revenue estimate for 2020/21 by R8.7billion compared with the projection in his June special adjustment budget.
