Tax revenue is expected to fall R56.8 billion short of what was anticipated in February, the budget update showed.
South Africa is considering digging into the nation’s R459 billion of foreign reserves to close a funding gap as tax revenue falls short of target, the nation’s finance minister said. The central bank oversees the Gold & Foreign Exchange Contingency Reserve Account, which contains unrealised profits or losses on the reserves that are incurred due to exchange rate fluctuations. While the gains — and losses — accrue to the government, the Treasury has refrained from tapping them so far.
There are also technicalities associated with accessing the account “because for the Reserve Bank to take the money out of the system, they are going to do it at a cost to themselves,” the minister added. “Let me just say that we are not ruling that out.” Tax revenue is expected to fall R56.8 billion short of what was anticipated in February, the budget update showed, and the National Treasury said it will ramp up borrowing, trim spending and raise taxes to compensate for the shortfall.
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