Star 2022-10-27

FINANCE Minister Enoch Godongwana will be throwing more money into law enforcement agencies next year to shore up their financial crimes-busting capabilities in a bid to stave off the potential greylisting of South Africa in February 2023. South Africa has a noose around its neck waiting for the Financial Action Task Force (FATF) to decide whether or not to greylist the country following the completion of a year-long observation period. This follows a year-long observation period after the FATF identified serious weaknesses in South Africa’s anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) framework in which the country scored a very poor ratings assessment on technical compliance, failing 20 of the 40 FATF recommendations. Tabling his Medium-Term Budget Policy Statement (MTBPS) in Parliament yesterday, Godongwana said the government…

STATE-owned enterprises (SOEs) will have to jump through hoops henceforth in order to receive government bailouts as contingent liabilities are expected to exceed R1 trillion by 2024/25. This was a stern message from Finance Minister Enoch Godongwana yesterday as he tabled his Medium-Term Budget Policy Statement (MTBPS) in Parliament. This comes as the National Treasury has begun developing a State-owned companies funding framework which will be finalised before the end of this financial year. The framework will complement the Presidential State-Owned Enterprises Council draft framework to guide decisions on disposing of and retaining State-owned companies. Godongwana said that the financial condition of many SOEs remained weak, with some having difficulty meeting their funding requirements because of their low credit quality. He said that the government will continue to enforce…

Revenue collection exceeded projections across most major tax categories since 2022 Budget THE FINANCIAL markets have welcomed South Africa’s improved fiscal position as the rand dipped below the R18-mark to the dollar for the first time in three weeks. The rand yesterday was 0.23% stronger at R17.97 against the greenback, its highest level since October 4 and better than its R18.20 close on Tuesday. The JSE All Share index also extended gains to close 1.9% higher at 67 103 index points as commodities-linked stocks and Naspers rallied. Finance Minister Enoch Godongwana yesterday tabled an optimistic Medium-Term Budget Policy Statement (MTBPS) with improved fiscal and debt outlook helped by buoyant revenue collection. FNB head of investment research Chantal Marx said the financials indices had spiked during the speech, turning positive…

THE MEDIUM-Term Budget Policy Statement (MTBPS) revealed an improved budget deficit for the first half of the 2022/23 financial year as a result of better-than-expected personal tax collections, lower levels of revenue refunds and higher commodity prices. According to the National Treasury’s In-Year Revenue Outlook, tax collections were 9% higher than the same period last year, and the gross tax revenue estimate based on corporate tax recovery improves the near-term revenue outlook. Tax is estimated to go up by R83.5 billion, with corporate tax income making up almost R62.8bn of that amount, with customs tax coming in at R11.5bn, despite imports statistics showing a decline of 17% during the same period. Personal income taxes came in as the third biggest contributor at R8.2bn. Income from VAT was 4.8% lower…

THE SA REVENUE Service (Sars) says it accepts the gauntlet laid down by Finance Minister Enoch Godongwana to collect more tax, which forms the majority of the country’s revenue. Sars provides about 90% of all government revenue. Delivering the Medium-Term Budget Policy Statement (MTBPS) in Parliament, Godongwana increased the revenue collection estimate that Sars must collect to R1.682 trillion from R1.598trln. Revenue collections as at September 30, 2022, amounted to R784.8 billion, yielding growth of R64.7bn (9%) against prior year collections of R751bn. “All collections against the previous year showed an upward trend except for the fuel levy, which recorded a contraction of R9.1bn (-20.9%). “The year-to-date growth was partially offset by the total refunds paid out, which were R32.5bn (20.9%) higher than the previous year, with…

FINANCE Minister Enoch Godongwana announced yesterday that the Covid-19 social relief of distress grant has been extended for one year until March 2024, but this decision comes with strings attached. In his 2022 Medium-Term Budget Policy Statement, Godongwana said the extension was to give the government additional time to consider options for working-age people that could replace, complement, or adjust the grant. The grant was introduced in May 2020 as a temporary measure to respond to the needs of the most vulnerable, who were affected by lockdown measures. It has been extended several times since then. Recently, several non-government organisations, trade unions, and researchers have called for the government to transform emergency relief grants into a fully-fledged universal basic income grant. Godongwana said discussions on the future of the…