South Africa Announces Higher Than Expected Revenue Collection

by Robert Lee, Tax-News.com, London

11 January 2002

Hopes are high that South African Finance Minister, Trevor Manuel, will grant significant tax relief in his budget next month, following the announcement that it has been a bumper year for revenue collection.

According to government estimates, the unexpectedly high revenue collection figures have helped to slash the budget deficit to around 1.8% of gross domestic product, compared with the 2.5% target set by Mr Manuel in his budget speech last February.

Head of the National Treasury's Budget Office, Andrew Donaldson, announced that the 'robust performance of tax revenue' demonstrated the effectiveness of government efforts to broaden South Africa's tax base and improve compliance. Between April and November of last year, as part of a crackdown on tax evasion, 274,000 new taxpayers were registered, bringing the total to around 3.4 million by the end of last year.

Industry specific audits also produced good results, and widespread abuses of travel, car, and medical allowances were uncovered. It was also revealed that many South African companies were utilising old tax assessments for provisional tax payments.

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