Finance Minister Nhlanhla Nene has warned that South Africa’s tax collection this year could well be lower than forecast this year, due to the downturn in the economy.

Addressing the Tax Indaba Conference in Johannesburg, Nene says tax avoidance and evasion would rise in any economy that was growing slowly and where taxes have been increased, a reference to this year’s hike in Value Added Tax, or VAT, from 14 to 15 percent.

The tax revenue target has been set at R1.345 trillion. Nene says government will prioritise fixing the economy.

“There’s now an additional downside risk to tax revenue projection due to a contraction in the economy in the first six months. Fixing our economy to ensure it grows faster is therefore critical. Faster economic growth means we will have more revenue to collect. Only a growing economy can create jobs and opp for lifting the poorest out of poverty.”