South African Finance Minister Trevor Manuel has defended the high revenue overruns of the state saying it was natural in an environment of strong growth, high corporate profits and more money being about.
He was present at the Finance Portfolio committee hearing on Tuesday with the South African Revenue Service — which has reported strong revenue growth for some years.
Manuel noted that corporate profits were recently reported as running at 22% while sales were running at 13% growth. South Africa was also working in an environment of the lowest interest rates in 23 years with families “being able to buy all sorts of things”.
There had also been a strong performance of South Africa’s trade tax in the last year with the import bill having increased while at the same time the rand currency had appreciated.
It was exceedingly difficult to provide precise information about revenue projections, he argued. Projection models applied largely to developed countries, he noted, in environments where interest rate changes boiled down to “fine tuning”. ‒ I-Net Bridge