Decline in tax revenue due to weak economy, says Godongwana

"At R1.73-trillion tax revenue for 23/24 is R56.1 billion lower than estimated in the 2023 budget. The shortfall is mostly due to the decline incorporate profits and revenue for taxes on mining."

Godongwana tabled the budget in Parliament on Wednesday

He says revenue projections over the medium-term are R45.6 million higher that the 2023 medium-term budget policy estimates.

He said while collection performed worse than anticipated, government departments have had to reprioritise spending and absorb the wage increase within their baselines.

Godongwana said the fuel levy will not be increased.

"We are mindful of the already high cost of living and the impact fuel prices has on the food and transport cost. In this regard we are proposing no increases to the general fuel levy for 24/25. Thus will result in the tax relief of around R4.billion. This is money back in the pocket of consumers."

Alcohol products excise duties-have increased between 6.7 and 7.2% for the 2024/25 financial year.

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He also proposed increases tobacco excise duties by 4.% for cigarettes and cigarette pipe tobacco.

"We are also proposing increasing tobacco excise duties by 4.7% for cigarettes and cigarette tobacco.  And by 8.2% for pipe tobacco, this translates into R9.51 for cigars, R0.97 to a pack of cigarette and an extra R0.57 for a pipe of tobacco."  

Godongwana says they are thinking about introducing tax payments for hubbly bubbly, e-cigarettes, and other alternatives.

"The country has seen an increase in a number of youth smoking these products and parents are not pleased at all. You would be happy to hear that we are tabling an increase on the excise duty on electronic nicotine and non-nicotine delivery systems known as vapes to R3.04 per ml."  

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