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With two months to go until Finance Minister Malusi Gigaba tables his medium-term budget policy statement in October, government revenue looks set to fall as much as R50bn short of February’s budget targets, bumping up the budget deficit and putting SA’s credit rating at risk of a downgrade. With the economy now forecast to grow at less than half the 1.3% which the February budget projected for 2017, and the South African Revenue Service understood to be experiencing significant challenges, the expected revenue undershoot would be even larger than the R30bn in the previous 2016-17 fiscal year, which was the largest shortfall since the financial crisis. Economists are crunching the numbers ahead of the medium-term budget, but PwC projects that tax collections for 2017-18 will come in R45bn below February’s budget estimates, which were themselves revised downwards. Some in the market expect the number could be substantially worse. PwC tax director Kyle Mandy said on Friday although it...

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