The commodity market bounce and higher-than-expected inflation may have come to Finance Minister Pravin Gordhan’s rescue, providing a last-minute boost to revenue collections ahead of Wednesday’s budget, and enabling him to reduce the sum he needs to raise in extra taxes to about R21bn for 2017. Revenue collections will still fall well short of last February’s target, while a weak economic growth outlook and the threat of a ratings downgrade will keep the pressure on Gordhan to rein in spending and deliver on promises to reduce the deficit over the next three years. Gordhan had to slash his three-year forecasts for economic growth and revenue collections when he presented his medium-term budget in October, after they had already been revised down in February. To prevent the fiscal deficit (the gap between spending and revenue) ballooning he lowered the government’s self-imposed expenditure ceiling and pencilled in R43bn of unspecified additional tax measures for the next two fiscal ...
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