South Africa’s Budget deficit for the 2003/04 financial year is likely to be less than the 2,6% of gross domestic product estimated in the February 2004 Budget, according to Minister of Finance Trevor Manuel.
Announcing the latest revenue collection figures for the 2003/04 financial year at a press conference in Cape Town on Thursday, Manuel said that as the revenue shortfall is only about R500-million, it will not have much impact on the estimated Budget deficit.
Although the government does not yet have its 2003/04 spending figures finalised, he added, the Budget deficit is “likely to come in below the 2,6% estimate”.
This will be due to lower-than-estimated spending figures, Department of Finance Director General Lesetja Kanyago confirmed.
Manuel said the government had collected a total of R302,816-billion for the year ended March 31 2004, just short of the Budget estimate of R303,3-billion as contained in the government’s main Budget. It had been a very difficult year for revenue collections, he commented, particularly in corporate income tax, given lower-than-expected economic growth and inflation over the period.
“It has to be unprecedented for a government to present its revenue numbers so soon after the end of a financial year — only nine hours,” the minister noted.
“By all accounts this is a most remarkable achievement that total revenue collections are only about R500-million under target, which speaks volumes of the strength of our systems, the quality of information and the efforts of the South African Revenue Service [Sars] in what has been a very difficult year.”
For the upcoming 2004/05 financial year, Manuel added that the government’s success in the past financial year “bodes well for an equally good performance in meeting the revenue target of R333,7-billion for 2004/05”.
“The core objectives for Sars remain broadly to improve operational efficiency, reducing the tax gap and improve its service levels to taxpayers.
“Building on these experiences, Sars will further its objective in this coming year by shifting to a more proactive approach across all its work prcesses. Sars will focus its attention on extending initiatives already undertaken to improve the levels of compliance with tax and customs laws, as well as the quality of service to the public.”
Sars Commissioner Pravin Gordhan said he is confident of further improvement in collections, noting that the organisation is still a young one, with many new systems and advances that can still be made in its collection techniques. — I-Net Bridge