Budget deficit widens to B, equivalent to 2.4% of GDP in 2016

The country saw a budget deficit of R118.2 billion in December last year — the biggest monthly gap in 2016 — bringing full-year gap to R353.4 billion or accounting for the 2.4 percent of the country's gross domestic product (GDP).

Based on the data from Bureau of Treasury (BTr), this was 9 percent lower than the government's revised program of R388.9 billion but wider than the deficit of R121.7 billion the year before.

"Relative to the economy, the deficit is still within the 2.7 percent revised target, coming in at 2.4 percent of the GDP," BTr said.

"This is significantly higher than the 0.9 percent deficit to GDP ratio recorded last year, and the highest level posted in the last five years," it added.

According to BTr, the outturns reflect strong expenditure growth of 14 percent resulting from the initiatives of the new administration to ramp up public spending for the second semester, outpacing the 4 percent increase in revenue collections.

Revenue collections for December, 2016 reached R165.3 billion, bringing full-year collections to R2.2 trillion.

Tax collections also grew by 9.1 percent in 2016, reflecting improved efficiency. To be exact, total revenue collections amounted to 15.2 percent of GDP, just 0.3 percent short of the 15.5 percent revised target and 0.5 percent below the 15.8 percent revenue effort last year.

The Bureau of Internal Revenue (BIR) particularly collected R117.2 billion for the month of December, up 10 percent or R10.9 billion year-on-year (YoY), while full year collections totaled R1.56 trillion, missing the revised program of R1.620.0 billion by 3 percent but surpassing 9 percent growth seen in the same period last year.

Meanwhile, collections from the Bureau of Customs (BOC) suffered an 8 percent drop in December against its 2015 revenue to total R34.8 billion. This mainly on account of lower noncash collections.

Despite this, the agency still managed to post an 8 percent growth for the full year to bring in a total of R396.4 billion. The growth was not enough to hit the target of R409.0 billion, however, of which the agency fell 3 percent short.

Adding back the R2.0 billion tax refund will result in total BOC collection of R398.4 billion.

BTr income for the month, on the other hand, reached R6.4 billion, 33 percent lower than the previous year while full year income is down 8 percent to R101.7 billion.

The decline is mainly due to the lower income from Bond Sinking Fund (BSF) and Securities Stabilization Fund (SSF) investments and NG deposits, given the diminished asset holdings of the BSF and lower cash holdings and