South Africa’s Customs Union partners are feeling the effects of 20% drop in volume a of exports and imports this year, according to finance minister Pravin Gordhan. Customs and excise duties will be R9-billion lower than budgeted, due to the decline in imports. “The resulting fall in customs revenue will negatively affect Southern African Customs Union members, which highlights the urgency of completing the proposed review and revision of the SACU revenue-sharing formula,” he told Parliament while delivering his mid-term budget speech. In total, tax revenue is expected to be some R70 billion less than the February budget projection. Income tax paid by companies will be R21 billion less than anticipated in the February budget, because of lower earnings VAT receipts will be R31 billion lower, because of reduced consumption real GDP is expected to be 1,9% lower this year than in 2008, and growth of 1,5% is projected for 2010, rising to 2,7% in 2011 and 3,2% in 2012. But, he warned “there is considerable uncertainty in these numbers – a faster global recovery could improve prospects for next year”. “But South Africa’s recovery lags behind global trends to some extent, mainly because households carry a substantial overhang of debt, which holds back more robust consumption expenditure.”
