South Africa’s Tax Measures to Boost Revenue Amid Rising Debt

Mouad Boudina
Mouad Boudina
2 Min Read
South Africa's Tax Measures to Boost Revenue Amid Rising Debt

The South African Finance Minister is set to introduce tax initiatives in the upcoming year to generate additional revenue, as outlined in a mid-term budget assessment released on Wednesday. This action comes in response to the National Treasury’s forecast of expanding budget shortfalls and increased debt levels anticipated over the next three years.

In the past decade, a significant impediment to South Africa’s economic growth has been the recurrent power outages due to operational issues at Eskom’s coal-fired power facilities. Additionally, the underperformance of the state-owned logistics company, Transnet, has exerted a further drag on overall economic growth.

Furthermore, the combination of reduced mining revenue due to declining commodity prices has led to diminished tax receipts. The treasury has indicated that revenue collections for the ongoing fiscal year 2023/24 are anticipated to fall short of the main February budget estimates by 56.8 billion rand ($3.04 billion).

The treasury has affirmed its unwavering commitment to restoring fiscal stability within the public sector. This objective will be pursued through a combination of prudent spending reductions, measured tax revenue adjustments, and efficiency-enhancing initiatives throughout the government. Part of this strategy involves reconfiguring the government, which may encompass the consolidation or closure of public entities.

While the treasury did not provide detailed specifics, Finance Minister Enoch Godongwana emphasized in his budget speech that the most effective means of financing the government’s operations involves improving tax administration efficiency and expanding the tax base.

Mouad Boudina

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