The ups and downs for the tax man of keeping the lights on

Corporate income tax is likely to be R11.7bn more for the full fiscal year, but VAT will be R13bn below February’s estimates

​Corporate income tax is likely to be R11.7bn more for the full fiscal year, but VAT will be R13bn below February’s estimates   

Small and medium-sized businesses (SMEs) reacted quickly to the end of load-shedding, with an increase in activity that saw them make the major contribution to the outperformance in corporate income tax collections reported in Wednesday’s medium-term budget policy statement (MTBPS).

But the budget numbers reflected both the upside and the downside of keeping SA’s lights on, with lower diesel use by Eskom, households and businesses feeding through to shortfalls in fuel levies, VAT on imports and customs duties. The Treasury now expects revenue to fall R22bn short of February’s budget targets for the current fiscal year, as a result of which deficit and debt ratios will be slightly worse than expected…

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