Sars Commissioner Edward Kieswetter. Picture: Moneyweb
South Africa has lost over R1.5 billion in revenue over the last month due to the ban on the sale of tobacco and alcohol as per the lockdown regulations dictated by the Disaster Management Act.
This is according to Commissioner of the South African Revenue Service (Sars) Edward Kieswetter.
Speaking during a joint virtual meeting between the Select and Standing Committees on Finance, Standing Committee on Appropriations and Standing Committee on Public Accounts, Kieswetter confirmed the revenue amounts that Sars has under-recovered over the last month to date (excluding 30 April 2020) due to the lack of economic activity in this sector.
The amounts that were under-recovered were listed as follows:
This is a grand total of R1,6 billion.
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Kiweswetter’s address was followed by a brief input from Finance Minister Tito Mboweni who justified Treasury’s decision to approach to the International Monetary Fund (IMF), Brics Bank and World Bank for R95 billion in relief funding.
“We have less revenue but greater pressures on the ficus to spend,” said Mboweni after stating that Treasury expects a 32% drop in the country’s overall revenue collection under the current circumstances.
“When people still demand more expenditure with revenue coming down, how do you close the gap? You close the gap by borrowing and restructuring your expenditure and closing some programmes altogether,” he added.
On the issue of the conditions attached to the funding offered by international institutions such as the IMF, Mboweni said it is his understanding that there will be no conditions attached to the relief loans and as such, he has no interest in discussing conditionalities with the IMF.
Furthermore, Mboweni said that he cannot promise that state-owned enterprises will not be sold after the lockdown is over.
“There will be sales of some poorly functioning state-owned enterprises and we need to grab the bull by the scruff of its neck and deal with this matter. There are those which are going to be sold and we will have to sell them.”
What is safe from the impacts of the lockdown and global pandemic, however, are pension funds, according to Mboweni.
Watch the full meeting below:
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