South Africa lost more in tax revenue in the first three-and-half months of its fiscal year than it borrowed from the International Monetary Fund and the African Development Bank combined.
A lockdown that initially shuttered almost all economic activity led to an under-recovery of 82 billion rand for the fiscal year through July 15, South African Revenue Service Commissioner Edward Kieswetter said Friday in an interview.
In the three months through June, there was an under-recovery of about 47 billion rand, with excise-duty collections including levies on alcohol, tobacco products and fuel contracting 42% from a year earlier. In February, the government left taxes unchanged due to “weakness in the economy” and opted to broaden the tax base, the Treasury said at the time. It has since said an additional 40 billion rand in taxes needs to be raised over the next four years.“The reality is that there was a need in February to raise 40 billion rand more,” said Kieswetter. “Right now, that need is significantly bigger than 40 billion rand because of the coronavirus.
The revenue agency will work with the National Treasury and Reserve Bank on proposals for the main budget review to be presented by Finance Minister Tito Mboweni in February, Kieswetter said.
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