South African 2018 Tax Revenue Just Below Budget, Nene Says

(Bloomberg) -- South Africa's tax agency collected 1.216 trillion rand ($101.3 billion) in the year through March, slightly below target.

Personal-income taxes comprised 38 percent of collections, Finance Minister Nhlanhla Nene told reporters Tuesday in the capital, Pretoria. Value-added tax contributed 25 percent to the total, he said.

The government had forecast 1.35 trillion rand of total revenue in the period, 1.22 trillion rand of which would be from taxes, according to the February budget. The government in November announced an inquiry to probe under-collection of taxes that increased under the leadership of Tom Moyane, who was suspended last month.

Former Finance Minister Malusi Gigaba forecast a budget shortfall of 4.3 percent of gross domestic product for the fiscal year. Economic growth for 2017 that exceeded the Treasury's projection may narrow the deficit by about 0.1 percentage point, Nene said, without giving the final outcome.

Cyril Ramaphosa's ascent to power since December boosted the rand and business sentiment after the scandal-ridden tenure of former President Jacob Zuma. Moody's Investors Service on March 23 maintained the nation's local- and foreign-currency assessments at one level above junk, citing the positive impact of the changes in political leadership and S&P Global Ratings last week doubled its GDP growth forecast for the year to 2 percent.

“There is a new optimism in our body politic and economic environment that we must embrace and harness,” Nene said. The Moody's announcement “was largely based on decisive action our president took to put us on a better trajectory towards growth.”

To contact the reporter on this story: Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.net.

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net, Ana Monteiro, John Viljoen

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