South African Finance Minister present his 2014/15 Budget to Parliament on February 26, the South African Institute of Tax Professionals (SAIT) has predicted that the Minister will have to introduce selective tax increases to make up for a shortfall in revenue collection.
It was noted that the slowdown in the economy and consumer spending towards the second and third quarter of 2013, combined with the strikes in the mining sector which cost the country ZAR11bn (USD1bn) in lost revenue, will negatively impact total projected revenue collection for the fiscal year ending March 30, 2014. SAIT’s has therefore concluded that “the 2013/14 budget revenue target of ZAR895bn set for tax revenue will certainly not be achieved.”
However, with lower income taxpayers suffering increasing financial pressure SAIT’ also commented that, in the 2014/15 Budget, “significant income tax relief is expected to be announced for those who earn less than ZARR165,600 per annum. While this is certainly welcome relief for (those on lower incomes), this measure will dash any chances of the National Treasury reaching their 2014 target for tax revenue” of ZAR985bn, only ZAR7bn less than the original 2013/14 estimate.
