JOHANNESBURG - Finance Minister Tito Mboweni today faces his biggest budget conundrum as he tables his Medium-Term Budget Policy Statement (MTBPS) in the midst of the Covid-19 pandemic and a stagnant economy.
The MTBPS which will be delivered by South African Finance Minister Tito Mboweni is a government policy statement which communicates the policy goals of government.
It also provides a macroeconomic context, the foundation for a three year budget forecast and the context in which the annual budget speech in February will be presented.
The MTBPS contains a spending review of national departments and each provincial government for the period of 1 April to 30 September of the current financial year.
Experts yesterday said that the situation could force Mboweni to introduce new taxes despite the country’s shrinking revenue collection base. Some said he could turn to two places for income: borrowing or the tax base, but the latter is currently undesirable as the country’s debt nears R4trillion this year.
Mazars tax partner Bernard Sacks said the government’s decision to ban the sale of alcohol and tobacco during lockdown had come back to haunt the national fiscus, leaving Mboweni with very little room to manoeuvre.
“The reduced tax take is likely to lead to a reduction in service delivery,” Sacks said. “The only change we’re likely to see, in my view, is the introduction of an extraordinary, once-off tax or some sort of levy.”
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