South Africa exceeded its tax-revenue target by more than R800-million in the 2007/08 financial year due to strong economic growth and efficient collections.
The Treasury said the South African Revenue Service (Sars) revenue service collected $571,807-billion in taxes, beating a forecast in February’s national budget of R571-billion.
South Africa’s tax intake has repeatedly exceeded forecasts, largely due to stronger-than-expected economic growth in Africa’s biggest economy, allowing for tax breaks and a budget surplus.
”Once again the resilience of the South African economy and the ability of Sars to mobilise efforts way beyond the call of duty has been demonstrated more than adequately,” Finance Minister Trevor Manuel told reporters.
”The results confirm the continuing expansion of our economy and the growing strength of the partnership between Sars and taxpayers.”
The economy expanded by 5,1% in 2007, just off a near-three-decade record set the previous year. Growth is seen slowing to 4% percent in 2008.
The Treasury said corporate income tax collections increased sharply on robust consumer demand and high commodity prices.
It added the main budget surplus expanded to 0,9% of gross domestic product for 2007/08 from a previously estimated 0,8%, but did not give a new forecast for the consolidated balance — which includes other payments and income — that was set at 1% in February.
Manuel reiterated the Treasury would not rush to the market to issue bonds, but added the government was working to help finance struggling electricity utility Eskom’s capital expenditure programme.
”Being in surplus at a time like this where there is a degree of market turmoil puts us in a position of distinct privilege. We are not going to rush out there and issue [bonds],” he said.
”We have made commitments to Eskom and we will work with them. We understand that the capitalisation of Eskom will require significant financing.”
Manuel announced in the budget the Treasury would transfer R60-billion to help Eskom boost flagging power capacity.
The utility plans to spend R343-billion over the next five years to expand and upgrade its grid. – Reuters