Finance Minister Tito Mboweni's maiden Medium-term Budget Policy Statement has begun in Parliament.
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It was hoped that the MTBPS would show South Africans whether their sacrifices over the last six months had made a positive impact so far.
This is according to Mike Teuchert, national head of taxation at Mazars, who said that the expected update on the SA Revenue Service’s (Sars) revenue collection efforts will likely generate a lot of interest with the public this year.
“Treasury set Sars’s revenue collection target at R1.345 trillion, which would represent a growth of 10.3 percent from the previous financial year. This would be made possible through measures like the increase in the VAT rate, taking advantage of bracket creep, the new levy on sugary beverages, and the very contentious increase in the fuel levy, to name a few.”
Teuchert noted, however, that there is not much confidence that Sars will be on track to achieving this target.
“While Treasury was initially confident about reaching the stated revenue target, this figure now seems rather optimistic following announcements by various institutions of a downward revision of the South African growth rate figures.”
The SA Reserve Bank has cut its estimate for South African gross domestic product (GDP) expansion to 1.2 percent from 1.7 percent, while the World Bank’s most recent predictions place GDP growth at 1 percent, and the International Monetary Fund (IMF) has almost halved its expected growth rate from 1.5 percent to 0.8 percent
Mboweni's main responsibility, according to analysts, is to restore fiscal discipline while balancing it with the needs of the poor?
Mboweni’s tough balancing act, some have said, will bode well with ratings agencies, while keeping him on the good books of labour unions.
Over the weekend, the minister reportedly expressed a concern that the public sector wage bill was high and that interventions were required to curb spending on salaries.
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