SA targets almost out of reach

Johannesburg - The South African fiscus has "almost no hope" of achieving the targets set for revenue collections in the 2010 financial year.

Even so, it was unlikely that South Africans will be called upon to bear the burden in the form of higher taxes.

This was the message conveyed by Professor Matthew Lester from the Department of Accounting, Rhodes University, Grahamstown, at a tax conference sponsored by the South African Institute of Chartered Accountants (SAICA) in Johannesburg on Tuesday.

His "no hope" conclusion summarised the topic of his address: South Africa 2009, a new government and stewardship of our money. What does it mean to you?

Lester examined the National Budget 2009/10 created in Trevor Manuel's swansong budget speech back in February 2009.

He observed that far from reaching the current year's revenue targets, it was now rather a case of how big the shortfall in tax collections would be and how long it would take for tax collections to recover.

"The general consensus seems to be that it takes two years to turn the corner after a financial crisis and we are in the second year now.

"Hopefully, with the Fifa World Cup and a general recovery of the world economy we should be getting back on top of things next year," said Lester.

"Fortunately," he noted, "South Africa has saved for a rainy day. There were no fiscal deficits for the three years before the credit crunch and this means that South Africa can survive fiscal deficits for two years before really having to confront the issue of increasing taxes.

"It's been a tricky run for a bit. But so far the South African taxpayer has got away with it."

- I-Net Bridge