By Ademola Badmus with agency report…
Jacob Zuma, who took over the office of president in 2009 with the South African Revenue Services (SARS) having collected R60 billion fewer taxes, left office with the revenue service starring at R50.8bn revenue shortfall.
The projected revenue was the highest since the 2009 recession, meaning that the Zuma presidency started and ended with record shortfalls.
Malusi Gigaba, the finance minister, said he will establish an inquiry into the tax administration procedures. He also said he expects the inquiry to be constructive and to strengthen the institution further where possible. He indicated that the tax revenue deficit was estimated to be R 50.8bn in 2017/18, increasing to R69.3bn in 2018/19 and R89.4bn in 2019/20.
“It is critical for government to determine the cause of the tax revenue under-collection in order to enable the government to take urgent remedial steps to ensure that SARS is able to meet its revenue targets as set out in the Medium Term Budget Policy Statement (MTBPS) and Budget,” Gigaba said.
The local currency which has been the best-performing currency against the dollar post the ANC elective conference in December last year was set to remain steady at around R11.70 against the dollar mark in the coming sessions. The installation of Cyril Ramaphosa as president helped to keen the rand steady trading at R11.66 against the US dollar on Thursday.
Cyril Ramaphosa, who was the sole candidate put forward by the National Assembly takes up the top post two decades after he was considered by Nelson Mandela as his successor, only to be pushed aside by the party in favour of Thabo Mbeki.
His nomination was seconded by veteran ANC MP Joan Fubbs, who said: “He is a selfless, disciplined leader and he knows he is here to serve the people of South Africa.”
Bianca Botes, an analyst at Peregrine Treasury Solutions, said the rand is expected to trade in a range of R11.70 to R12 against the greenback, leading up to the budget speech.
“Should the state of the nation and the budget speech go down without too much criticism, one can almost assume that Moody’s will hold off from downgrading South Africa’s credit rating for the time being,’’ Botes said