Doubts raised over the Treasury’s tax revenue forecasts
‘The consistently significant shortfalls against forecasts have, in our view, now resulted in a credibility concern’
Revenue collection has consistently fallen short of budget revenue forecasts since 2014/2015, raising questions over the reliability of the Treasury’s forecasting models, a tax expert argued in parliament on Wednesday. This raises the danger that the budget deficit will be higher than the Treasury’s forecast for 2019/2020, PwC tax-policy leader Kyle Mandy said. He addressed a public hearing on the 2019/2020 budget organised by parliament’s two finance committees. Mandy noted that revenue forecasts have fallen short of budget forecasts by a total of R141bn between 2014/2015 and 2018/2019. The revenue shortfall of R42.8bn in 2018/2019 compared with the 2018 budget forecast was attributed by the Treasury to weaker than anticipated economic growth, higher VAT refunds, and problems with tax administration at Sars. Gross tax revenue is forecast to rise from R1.3-trillion in 2018/2019 to R1.4-trillion in 2019/2020. “The consistently significant shortfalls against forecasts have, in our vie...
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