Finance Minister Nhlanhla Nene has warned that tax revenue collection may be lower because of the recession — potentially putting SA’s last investment-grade rating at risk. Speaking at the Tax Indaba in Sandton on Monday, Nene said: “The 2018 budget gave SA a credible path forward to keep an investment grade with one of the three credit rating agencies. “However, there is now a downside risk to tax revenue because of the contraction in the first six months.” The medium-term budget policy statement takes place in October. Nene said growing the economy is “now critical” to expand the tax base. The ability of a government to borrow at reasonable interest rates is underpinned by tax collections, he said. Tax collection has disappointed in recent years, against the background of a slow economy and the inefficiency of the tax administration, said Nene. To make up for shortfalls, Treasury has increased personal income tax in recent years, and this year increased value-added tax (VAT). Stab...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00.