South Africa is yet again facing another major tax shortfall, according to Momentum Investments.
The financial services provider on Tuesday said that based on current tax receipts and expected VAT refunds, the SA Revenue Service would be collecting "around R50bn" less tax than projected in the 2018 Budget.
Finance Minister Tito Mboweni is expected to announce changes in projected tax revenues for the 2018/19 financial year when he presents the medium-term budget policy statement, or mini budget, on October 30.
In a joint mini budget preview, Momentum's Herman van Papendorp, Sanisha Packirisamy and Roberta Noise said the tax agency was facing shortfalls in personal income tax, corporate income tax and VAT.
While government projected a 12.45% boost for personal income tax in the February, growth in the year to date has been only 6.9% - well under the average at the same period over the past five years. Depressed business conditions, meanwhile, mean that corporate income tax has also disappointed, while VAT revenues are lower than the same period last year.
"Tax shortfalls have occurred in spite of the implementation of additional tax hikes, including the 1% VAT increase and an increase in taxes for the top tax bracket," wrote Momentum. "There is a growing concern that the country has approached its limit on advancing tax revenue collections through further tax increases for taxpayers."
Earlier in October SARS head Edward Kieswetter told Bloomberg that it is "going to be hard" to reach the estimated R1.58trn revenue that Treasury forecast.
Kieswetter, appointed as permanent head of the revenue collection agency in March, said part of the difficulty in meeting targets was that resources allocated to SARS have been "significantly constrained, for no other reason that there just is no money."
“Unless we have the resources to rebuild the capability, the project of restoring SARS is at risk,” he said.