Deloitte Africa on SA’s mid-term budget expectations

Deloitte Africa's Director for Transfer Pricing & International Tax, Musa Manyathi, recently shared some insights on South Africa's mid-term budget expectations in an interview with CNBC Africa. Manyathi expressed Deloitte's positioning on potential tax increases, stating that in the current economic climate, they do not foresee any VAT or general tax hikes. With the country facing a significant budget deficit and decreased mining taxes, Manyathi discussed Minister Tito Mboweni's options for addressing the financial shortfall. While increased borrowing is on the table, Manyathi highlighted the importance of enhancing efficiencies at the South African Revenue Service (SARS) to narrow the tax gap. He emphasized the need for improved compliance measures and the utilization of digital technologies to optimize tax collection. Manyathi also underscored the critical role SARS plays in revenue generation and suggested that focusing on SARS rather than excessive borrowing may be more beneficial for sustainable fiscal management. Despite the challenges ahead, Manyathi remains optimistic that SARS will continue to demonstrate its ability to contribute significantly to the country's revenue stream. As South Africa navigates its economic landscape, the effectiveness of tax collection strategies and the management of fiscal policies will be key in addressing the country's financial challenges.