South Africa’s Poor Tax Revenues To Delay Fiscal Consolidation: Reuters Poll

www.oann.com | 7/13/2017 | Staff
JOHANNESBURG (Reuters) – South Africa’s finance minister is expected to address concerns over dwindling tax revenues in his mid-term budget on Wednesday to reassure credit agencies of his commitment to a tighter purse, a Reuters poll found.

Malusi Gigaba is due to give his first review on finances on Oct. 25 and economists expect him to announce a revenue shortfall of 40 billion rand ($3.0 billion) for the year that began in March due to poor tax receipts.

Challenge - Concerns - Underperformance - Tax - Collections

“His first challenge will be to deal with the concerns surrounding the underperformance of tax collections in the first five months of the current fiscal year,” said Jeffrey Schultz, economist at BNP Paribas in Johannesburg.

Low tax receipts means the consolidated budget deficit will widen to 3.9 percent of GDP in 2017/18 from a February Treasury estimate of 3.4 percent for the previous fiscal year, according to medians in the poll of 15 economists taken this week.

Revenue - Performance - Collections - Income - Tax

“This lackluster revenue performance has come from weaker collections of personal income tax, custom duties, fuel levies and excise duties; collections of corporate income tax remained broadly stable, while growth in value-added tax was higher than in the year-ago period,” Schultz said.

Former Finance Minister Pravin Gordhan...
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