Johannesburg - Battered South African consumers face the possibility of another credit crunch. This will be the result of lagging tax collection, which could see government try to find new ways to plug its revenue gap. Consequently, tax hikes next year could well be an option.
Raising debt to plug any tax shortfall could be another option government could pursue, but this would place pressure on the country’s credit rating, which was downgraded to “junk” status in April. Cutting expenditure is in all probability the least likely avenue the state will pursue to balance its books.
On average, South Africans have been getting poorer since 2015. Gina Schoeman, a Citigroup economist, said this week at a conference that this trend would remain until 2020.