The South African government has collected R11-billion more than it originally budgeted for in the 2004/05 financial year, due largely to higher-than-forecast receipts from personal income tax and value-added tax (VAT), according to South African Finance Minister Trevor Manuel.
Presenting the government’s latest 2005/06 budget in Parliament on Wednesday, Manuel said the National Treasury was revising upwards its revenue estimates for the 2004/05 financial year, to R338-billion from R327-billion in the original 2004 Budget estimate.
This is a 12,9% increase on the total revenue of R299,43-billion collected in 2003/04, and represents a revenue-to-GDP ratio of 24,1%, below the government’s 25% targeted ceiling.
Personal income tax is estimated to reach R111-billion, R5-billion more than originally budgeted and 12,6% higher than the 2003/04 financial year.
This is mainly due to higher wage settlements and an increase in employments numbers, Manuel said.
The revised estimate for corporate income tax is R65,5-billion, almost 5% less than originally budgeted, due to lower-than-expected corporate profits, mainly in the mining sector. The tax on retirement funds is being revised downwards by R1,5-billion, attributable to a switch by funds from interest-bearing instruments to equities, and because of a general reduction in market interest rates.
Revenue from VAT is expected to raise R95,5-billion, R6-billion higher than the 2004 Budget estimate, which “clearly reflected” the buoyancy in consumer demand, Manuel said. However, the revised estimated revenue from specific excise duties of R13-billion is in line with budget expectations, while fuel levels are forecast to raise R18,8-billion, about R1,4-billion higher than originally budgeted. – I-Net Bridge