Revenue collection is expected to fall by some R56 billion below the 2023 Budget predictions, according to the National Treasury Medium Term Budget Policy Statement (MTBPS).
This, according to Finance Minister Enoch Godongwana who delivered the MTBPS in Parliament on Wednesday.
The Minister observed that slowing commodity exports, slower growth, downward revisions of the tax base growth, slowing corporate tax collections and lower net VAT collections have all impacted tax revenue.
The 2023 Budget had projected that collections would reach some R1.78 trillion but that has now been revised down to R1.73 trillion.
Addressing Parliament, Godongwana emphasized that improved economic growth and further gains in tax administration are critical for increased tax revenues.
“In recent years, revenue collection has benefited from a pattern of high prices for South Africa’s commodity exports. In the current year, commodity prices have fallen faster than expected and value‐added tax (VAT) refund claims have risen, resulting in revenue collections projected to be R56.8 billion below 2023 Budget estimates.
“The moderate revenue outlook is limited by the domestic economic outlook and negative shifts in the global economy,” said Treasury.