Finance Minister Enoch Godongwana said the figure was a R10.3 billion upward revision from the 2022 Medium Term Budget Policy Statement (MTBPS) estimate.
If achieved, collections would surpass the 2022 Budget projection by R93.7 billion.
According to the National Treasury, the amount was attributed to sustained growth in corporate tax collections in the second half of 2022/23 in the manufacturing and financial sector firms. This, Godongwana said, was as tax-to-Gross Domestic Product (GDP) ratio continued to recover from COVID-19 induced lows.
The National Treasury in the 2023 Budget Review document projects that tax-to-GDP would reach 25.4% in the 2022/23 financial year.
It said: “Income and profits have proven more resilient than anticipated a year ago. Corporate income tax collections from mining remain large in historical terms due to elevated – although declining – commodity prices.
“Higher profitability in the services sector has supported corporate and dividends tax collections. Personal income tax collection has been buoyed by a recovery in earnings and improving employment levels,” reads the document.
Growth in import prices supported noteworthy collections in import value-added tax (VAT) and customs duties, the Treasury stated.
VAT refund payments exceeded the 2022 Budget expectations due to increased zero-rated exports from manufacturers. Enhanced tax administration has also contributed to additional revenue collection during the recovery period.
Despite the improvement, the Treasury warns that the scope of power cuts and weak global growth pose significant risks to the outlook.
In the document, Treasury revises down net VAT collections from the 2022 Budget. This, it said, was due to larger-than-expected VAT refund payments associated with zero-rated manufactured exports that offset robust growth in import VAT.
“Domestic VAT is projected to outpace previous estimates but persistent inflationary pressures and rising borrowing costs may erode consumer spending power, curtailing domestic demand,” read the report.