Chief economist at Investec, Annabel Bishop, says a possible R100 billion underestimation in tax revenue collections may provide the extra cash that government needs to fund its vaccine roll-out programme.
Bishop’s comments come ahead of Finance Minister Tito Mboweni’s 2021 Budget on Wednesday afternoon.
Bishop says tax hikes are also unlikely considering government’s higher tax revenue estimates for the current financial year.
She says government may find itself even borrowing less this year.
“We continue to believe that there’ll be little need to hike taxes in this budget. In fact, we believe that government actually should be able to give back a little bit from a fiscal drag perspective. We even hope that we may not even see a hike in the fuel price and of course any hikes in sin taxes as well. From an allocation perspective, of course, there’ll need to be increased allocation towards the COVID-19 relief efforts and of course government has already indicated some areas where it has reduced expenditure to accommodate this.”
Chief Executive of Pan African Holdings, Dr Iraj Abedien, says the most important thing that Mboweni has to address is economic growth.
He says government needs to make sure that investment takes place and jobs are created:
Director at Economist.co.za, Mike Schussler, says it is going to be a difficult budget for the country: