The “how” of sustaining vital government expenditure was always going to be a significant challenge in finance minister Tito Mboweni’s 2019 budget. Between the need to bail out state-owned enterprises (SOEs) and ensure higher growth in upliftment of social services, especially in education and healthcare via the proposed National Health Insurance (NHI) scheme, the answer isn’t clear. Fiscal targets are expected to be undershot, given the poor economic growth in 2018, and the announcement at last year’s medium-term budget policy statement (MTBPS) that the National Teasury expected lower economic growth than previously reported. At the same time, it has been increasingly clear in recent years that the scope to close the gap between revenue and expenditure through higher tax rates has been significantly used up. Whether through weak economic growth, increased emigration or progressively ineffectual systems at Sars to collect taxes, the buoyancy of tax collections relative to economic a...

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