
Budget | Fitch questions Treasury’s fiscal consolidation narrative
National Treasury forecasts a narrowing deficit, from 4.8% of GDP in 2025/26 to 3.8% in 2026/27. Fitch, however, projects larger deficits of 5.1% and 4.5% respectively.
National Treasury forecasts a narrowing deficit, from 4.8% of GDP in 2025/26 to 3.8% in 2026/27. Fitch, however, projects larger deficits of 5.1% and 4.5% respectively.
The revised Budget reveals the hard truth: with limited borrowing room and rising demands, Treasury must make tough calls on what to fund – and what to cut.
The Budget Overview outlines plans to overhaul public spending processes, aiming to identify inefficiencies.
Sanlam reports that most withdrawals came from financially strained members in mid-life, with little evidence that funds were used to reduce debt. Instead, spending patterns suggest pressure to cover everyday expenses.
Danie van Zyl of Sanlam Corporate Investments warns that allowing access to retirement components in retrenchment cases might jeopardise long-term savings and place added pressure on trustees.
The Minister of Finance cites an average 19% VAT among peers to argue that South Africa’s 15% rate is low, but isolated comparisons miss key factors such as exemptions, corporate rates, and overall business costs.
With the government now R8.6 billion short, planned social grant increases have been slashed – while Home Affairs and border management also see deep budget cuts.
Experts slam the idea of a VAT increase, pointing to a record tax burden and bloated expenditure. From uncollected billions to inefficient governance, the real fix lies in reining in waste, not squeezing taxpayers.
Instead of hiking VAT, the government could fix its tax collection problems, improve state resource management, and stimulate the economy to boost revenue.
The VAT hike could add R58bn to government revenue, but with coalition partners clashing over its impact on ordinary South Africans, the debate over how to fund critical services without deepening the cost-of-living crisis is far from settled.
With South Africa’s debt-to-GDP ratio at 75.1%, Finance Minister Enoch Godongwana faces a tough balancing act – can his Budget Speech reassure investors and spark economic growth?
A dip in corporate and VAT revenues has left a R10bn hole in expected tax collections. As the Budget approaches, Treasury faces a difficult balancing act.
This is double the initial estimate of between R5bn and R6bn.
The Global Minimum Tax Act aims to level the playing field for multinationals while potentially adding R8 billion to South Africa’s tax base by 2027.
More than 3.6 million companies were registered with SARS, and only 0.1% of them contributed 72.3% of corporate income tax revenue in 2022.
The MTBPS shows tax revenue will be below the Budget estimates, but SARS is adamant it will do everything in its power to collect as much money as it can.
The Medium-Term Budget Policy Statement reveals a budget surplus and reduced wage bill, but it warns of ongoing financial pressures due to modest economic growth projections.
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