South Africa to intensify tax effort next year as part of efforts to cushion the effects of the drop in mining revenue and boost public finance.
Also, the intensity of efforts is also due to the need for the government to alleviate the pains of the public following the projection that the nation will experience the next three years a wider budget deficit with the current administration.
These renewed efforts in taxation will include the proposal of tax changes for economic stabilization of public finances feeling the brunt of the drop of revenue from the mining sector.
South Africa to Intensify Tax Effort: More Perspective
Adding more perspective to the expected decline, the National Treasury in the document submitted for legislation expressed commitment to spending reductions, moderate tax measures, and efficiency gains from merging or closing public entities.
It is important to state that the affected public entities in recent times had at one point or the other required repeated bailouts from the government hence the need for merger or closure.
The new forecast and projected plans of the government are already yielding some positive fruits as the South African rand and bonds gained after the announcement which some experts regarded as better than the market had anticipated.
Although The Treasury did not spell out what tax measures were envisaged, it expressed that the minister of Finance would propose a clearer measure. Read the statement below:
“Given the extent of fiscal consolidation required, the minister of finance will propose tax measures to raise additional revenue of R15bn in 2024/25 in the 2024 budget,”
2023 Economic Growth So Far
South Africa’s 2023 economic growth is now with a forecast of 0.8%, from 0.9% seen in February and the 1.9% growth recorded in 2022.
So far, the South African economy has experienced a major limitation to growth from state companies.
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