#BudgetSpeech2019: "We expect tax revenues to grow in line with GDP growth" - PwC
CAPE TOWN – Minister of Finance Tito Mboweni will deliver the Budget Speech 2019 in Cape Town on 20 February.
According to PricewaterhouseCoopers, the former central banker’s task is formidable, and his balancing act will need to be performed with the skills of a trapeze artist.
PwC has considered some of the most crucial factors that will be addressed in the Budget Speech 2019.
These include, amongst others:
PwC expects the finance minister to reiterate some of the comments in SONA 2019 on how South Africa is now a much more business-friendly place compared to some 12 months ago.
PwC forecasts a fiscal budget deficit of 4.3 percent of GDP during the current (2018/19) fiscal year. This will be larger than the 4.0 percent of GDP projected by the MTBPS, largely as a result of a projected R10 billion shortfall in revenue collections than the National Treasury was expecting in October last year.
PwC expects Minister Mboweni to once again affirm the independence of the SARB in terms of how the central bank determines its monetary policy.
PwC said in a statement: "We expect tax revenues to grow in line with GDP growth to approximately R1 408 billion, some R22 billion below the MTBPS forecast. No change is expected in the general corporate tax rate of 28 percent. Any increases would negatively impact on the competitiveness of SA’s tax rates (the global trend for corporate tax rates is downwards) and would not be in line with the objective of promoting economic growth."
"We do not expect significant tax increases in PIT and it is likely that full relief for fiscal drag will be given, with possibly the exception of the highest tax brackets."
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