JOHANNESBURG - Years of continued tax revenue growth, despite a decline in the rate of economic growth has now come to an “abrupt” halt, says Finance Minister Malusi Gigaba in his first mini-budget delivered in Parliament.
The biggest downward revision for budgeted tax collections has been for Personal Income Tax, although all tax types have performed poorly.
The other two major contributors to tax collections, Corporate Income Tax and Value Added Tax have also performed well below expectations.
Personal income tax collection has been affected by low bonus payments, moderate wage settlements, job losses and a slower expansion of public sector employment.
National Treasury has revised tax collections from individuals down with R20.8bn from the budgeted R482bn.
In the February budget, former Finance Minister Pravin Gordhan, expected revenue from corporate tax collections of R218.7bn.
This has been revised down to R213.8bn. Value Added Tax has been revised down to R301.3bn from the budgeted R312.8b. Customs duties have been revised downwards by R5.4bn to R47.2bn.
National Treasury says revenue weakness can be attributed to a number of economic factors that were not anticipated in February. This include a slowdown in sectors which have supported buoyant tax collections such as finance, retail and telecommunications.
The decline in tax collections from companies have been attributed to “persistently weak growth” and commodity price volatility.
VAT has been affected by lower than expected household consumption.
-BUSINESS REPORT ONLINE