Finance Minister Tito Mboweni will table the 2021 Budget next week (24 February 2021).
Against a background of numerous challenges – from the Covid-19 crisis to unemployment and ratings downgrades – PwC economists and tax experts have released their predictions for the Budget Review 2021.
They include the following:
* That budget margins will be trimmed at the margins and reprioritised towards medical and other necessary social expenditure.
* The Finance Minister is likely to restate the government’s commitment to reducing the public sector wage bill.
* The Minister will emphasise the need to ensure an active approach to debt management.
* Political pressures are likely to prevent the National Treasury from reducing the quantum of expenditure allocated to the bailout of SOEs.
* Given the rising levels of government debt, it is unlikely that rating agencies will be satisfied with Budget 2021.
* Budget 2021 is likely to give full details as to the total costs of rolling out the Covid-19 vaccination programme.
* It will not be necessary to increase taxes to fund the vaccination programme.
* Tax revenues are likely to exceed the forecasts made by the MTBPS 2020 by between R100-billion and R108-billion.
* It is expected that tax increases proposed in the MTBPS 2020 will not be introduced while those for the outer years will be relaxed.
* Tax revenues for the 2021/22 fiscal year will approximate R1,3-trillion.