"Chaotic budget cuts" are not the answer to the shortfall between tax collections and government spending, the Institute for Economic Justice has warned.issued to national and provincial departments on 31 August, the National Treasury pointed to an"exceptionally large" drop in tax revenue of R22-billion for the first five months of the year.
They estimate the revenue shortfall for the financial year at about R67-billion, in line with the Treasury's figures. Mostly, the slower tax collections are the result of a slump in mining, which had contributed a bigger and bigger chunk of corporate taxes in the last few years. Taxes paid by firms in other sectors, and income tax paid by individuals, have been in line with expectations.
Borrow more. In 2022-23 South Africa's debt was at 71% of gross domestic product, which is in line with the average of 69% for comparable economies. And even if the whole budget mismatch was covered by borrowing, the debt to GDP ratio would barely change, they say. Though in the long term South Africa's debt trajectory is a concern, current levels is not at"crisis" levels.There was a problem processing your submission. Please try again later.