Estimated gross tax revenue for this year has been revised downwards by R13 billion, to R728.6 billion, according to Finance Minister Pravin Gordhan's 2011 medium-term budget policy statement (MTBPS) tabled in the National Assembly on Tuesday.
During 2007/08, gross tax revenue increased year-on-year by 15.6 percent, reflecting strong economic conditions, the document says.
This rate of increase slowed to 9.1 percent during 2008/09, and, following the 2009 recession, gross tax revenues declined by 4.2
percent.
Sharp falls in corporate income tax, value-added tax (VAT), secondary tax on companies and customs duty revenues led the decline.
As conditions improved during 2010/11, nominal gross tax revenues grew by 12.6 percent year-on-year, with significant increases in personal income tax, VAT, customs duty and fuel levy revenues.
Despite the recovery in GDP growth, the lagged effects of the economic downturn meant that corporate income tax revenues continued to decline.
However, gross tax revenues are expected to increase by 8.1 percent in nominal terms this year over the previous year.
The revised estimate of gross tax revenue of R728.6 billion, is largely the result of a downward revision in net VAT receipts to R187.5 billion, R13.4 billion below the 2011 Budget estimate, owing to an underestimation of VAT refunds for 2011/12 at the time of the budget.
The higher VAT refunds during 2011/12 appear to be mainly a result of increases in nominal imports, exports and gross fixed investment during 2010/11 and 2011/12.
Revenue collection for the current year, and the forecast for 2012/13, reflect weaker economic conditions.
Overall, budget revenue has been revised down by R10.3 billion in 2011/12, and by R18.8 billion in 2012/13.
This takes into account a revision to the Southern African Customs Union (SACU) payment in 2012/13, which will include an adjustment for an over-collection in 2010/11.
As the business cycle turns in the outer years, the fiscal framework envisages improved revenue performance, the document says. - Sapa