Budget statement notes strong growth in revenue collection in 2022/2023

Revenue collection in the past year has remained strong, with total tax revenue R93.7bn higher than the estimate given in the 2022/2023 budget, according to the Budget Review, delivered on Wednesday afternoon.

Personal income tax collected in 2022/2023 is forecast at R601.6bn, up R13.7bn from the R597.9bn estimated at the time of the 2022/2023 budget.

Corporate income tax of R345bn is expected, R75bn higher than the budget forecast of R270bn.

However, VAT is expected to be lower by R13.4bn coming in at R426bn as against the budgeted estimate of R439.7bn.

Collection of the fuel levy is expected to be about R10bn lower at R79bn due to the R10.5bn fuel levy relief given during the first half of 2022/2023. Specific excise duties are expected to generate R3.4bn more at R55.2bn. The health promotion levy (sugar tax) is forecast to bring in R2.3bn to the fiscus.

Nontax revenue, which includes mineral and petroleum royalties, mining leases, departmental revenue and sales of capital assets, is expected to be R21.8bn higher at R55bn.

“Elevated commodity prices have boosted mining tax revenue,” finance minister Enoch Godongwana said when delivering the budget statement. “The mining sector accounts for nearly 30% of provisional corporate tax collections in 2022/2023 — significantly higher than its average share before 2020/2021.

“Collections from the finance and manufacturing sectors remained strong, in part because economic growth exceeded expectations, supporting the better-than-expected corporate tax performance.”

The downward revision of VAT collections was due to larger-than-expected VAT refund payments associated with zero-rated manufactured exports, which offset robust growth in import VAT.

“Domestic VAT is projected to outpace previous estimates but persistent inflationary pressures and rising borrowing costs may erode consumer spending power, curtailing domestic demand,” the Budget Review noted.