MEDIUM-TERM BUDGET: TAX REVENUE
Shortfall revision largest since recession
Gross tax revenue in this fiscal year is expected to be R50.8bn lower than that which the Treasury projected in February
The tax revenue shortfall was higher than the R40bn-R50bn economists had expected, making it the largest downward revision since the 2009 recession, the Treasury said. Gross tax revenue in this fiscal year is expected to be R50.8bn lower than that which the Treasury projected in February, when the budget was tabled by former finance minister Pravin Gordhan. The shortfall is projected to widen to R69.3bn in 2018-19 and to R89.4bn in the third financial year. Despite this, Finance Minister Malusi Gigaba said on Wednesday: "Given that per capita income is falling, the economic impact of further expenditure cuts or tax hikes could be counterproductive." The economy is unlikely to muster stronger growth and is expected to reach a growth rate of 1.9% only in 2019-20, according to the Treasury’s latest growth forecast. The revenue shortfall in 2017 is largely due to lower customs duties. This follows a sharp contraction in imports as a result of weak investment and lower household consumpt...