Growth target at risk‚ says Gigaba
National Treasury’s growth forecast of 1.3% for 2017 may be at risk‚ according to Finance Minister Malusi Gigaba.
Speaking at the Tax Indaba in Sandton on Monday‚ Gigaba said he was positive that growth will materialise in the coming quarters but that a revised outlook may be revealed in the Mid-term Budget Policy Statement to be released on October 25.
Gigaba said the GDP growth for the second quarter of 2017 was promising but that there was broad-based weakness in the industrial and services sectors.
GDP growth for the second quarter was 2.5% quarter-on-quarter and 1.1% year-on-year.
“The most important step we can take to develop the country is to get South Africans working. We welcome initiatives from the CEO Initiative and Business Unity South Africa to grow the economy inclusively‚” Gigaba said.
Gigaba said he would focus on the 14-point plan announced in June to bolster growth.
“Although the second quarter GDP growth came as a relief to all of us … Our current level of growth is clearly insufficient and unsustainable. We simply have to take drastic measures to grow the economy sustainably.”
Giagaba explained that taxation remained crucial to SA’s democracy and allowed the state to provide public services.
“Government bears the responsibility to manage public finances prudently and effectively‚” he said.
He said there had been greater public interest in tax policy after a few years of below-par growth.
SA Revenue Service commissioner Tom Moyane said the revenue target for 2017 remained a huge stretch in an economy with weak growth.
“The role of SARS as a tax organisation becomes even more significant with low economic growth but SARS remains committed to its mandate of collecting all its revenue for 2017.”