Freight transport income drops 9.4%

June 2009 Treasury tax revenue tables show just how bad business has been this year. VAT returns for the second quarter of this year are down 30% from the same period last year indicating a decline in sales, another sign of the recession that we are experiencing, says Mike Ronald, an investment professional at Marriott “Not only is VAT down, but corporate tax collections are also lower by some 15% indicating lower taxable earnings.” The direct impact on the freight industry is reflected in StatsSA estimates of income from freight transportation for the second quarter of 2009, which dropped by 9.4% compared with the second quarter of 2008. The payload decreased by 10.3% for the second quarter of 2009 compared with the second quarter of 2008. Income from freight transportation for June 2009 decreased by 9.2% compared to June 2008. However, government is continuing investment where it matters for the economy and the transport industry. “Government spending has continued at expected levels,” says Ronald. There is a price to pay: “This has resulted in an actual deficit after the fiscal year’s first quarter of R60-bn compared with a budgeted deficit of R95bn for the entire year. “Current tax receipts show not only declining consumer spending and corporate earnings but they also point to the need for government to borrow more in the year ahead.”