The National Treasury published its monthly government revenue and expenditure data for December on Friday (29 January), showing better than expected revenue collection ahead of the February budget.<\/p>\n
In the first nine months of the 2021\/22 fiscal year, South Africa’s gross tax revenue rose by 29.5% year-on-year. This compares with the projection for a 19% increase for the entire fiscal year, through to March 2022, outlined in the November 2021 Treasury budget statement, the Bureau for Economic Research (BER) said in a research note on Monday.<\/p>\n
“If the current rate of outperformance is sustained through March, tax revenue in 2021\/22 will exceed the November projection by a significant R132 billion.<\/p>\n
“This supports our view that the main budget deficit for 2021\/22 will turn out to be notably smaller than the 6.6% of GDP projected in November.”<\/p>\n
Finance minister Enoch Godongwana is set to deliver his maiden budget address on 23 February. In his medium-term budget policy statement (MTBPS) on 11 November, Godongwana said the\u00a0government is still committed to reducing the budget deficit and stabilising the debt-to-GDP ratio \u2013 and, barring major new shocks or unbudgeted spending commitments, staying the course will lead to a primary fiscal surplus in 2024\/25.<\/p>\n
\u201cOver the next three years, spending will remain restrained. To avoid a widening of the budget deficit, changes to spending will be funded through improved revenue performance or through reprioritisation and reviewing existing programmes.\u201d<\/p>\n
South Africa\u2019s fiscal position was already weak prior to the economic crisis in 2020. While surging commodity prices have improved the in-year revenue outlook, these temporary benefits result in declining surpluses over the medium term.<\/p>\n
Notably, revised revenue projections fall short of pre-Covid-19 expectations by R284.7 billion until 2022\/23, Treasury said.<\/p>\n