Post MTBS Analysis: A tax review of finmin Godongwana’s medium term budget speech

South Africa's Minister of Finance, Enoch Godongwana, recently presented his maiden medium-term budget speech, unveiling better-than-expected tax revenues due to a surge in commodity prices. However, the specifics of the country's tax plans will only be disclosed in February next year, leaving many wondering about potential tax increases. In a CNBC Africa interview, Musa Manyathi, Director of International Tax & Transfer Pricing at Deloitte, shared insights on the trajectory of tax policies and revenue collection in South Africa. Manyathi expressed optimism about continued growth in revenue collection, attributing it not only to the commodity boom but also to the diligent efforts of the South African Revenue Service (SARS). He highlighted that SARS' meticulous work in investigations, audits, and enforcement of legislation has significantly contributed to the positive revenue trend. While Manyathi indicated that a tax rate increase is likely, he clarified that an increase in actual taxes may not be imminent. He suggested that a portion of the windfall from commodities could be directed towards social grants, especially in light of recent social needs arising from the July unrest. Manyathi also alluded to a potential rise in calls for a permanent social grant income, noting that the government may contemplate increased social spending following the local government election. The interview underscored the importance of balancing economic growth with effective revenue collection strategies to sustain positive revenue outcomes.