What to know before the mini budget

Earlier in the year, Treasury introduced a number of tax increases that placed significant strain on taxpayers.

It’s hoped the 2018 Medium-Term Budget Policy Statement (MTBPS) will show South Africans whether their sacrifices over the last six months have made a positive impact.

The update on South African Revenue Service’s (Sars) revenue collection efforts will likely generate interest.

Treasury set Sars’ revenue collection target at R1.345 trillion – up 10.3% from the previous financial year. This would be made possible through the increase in the VAT rate,

However, this figure now seems optimistic following announcements of a downward revision of SA’s growth rate.

The Reserve Bank has cut its estimate for SA’s GDP expansion to 1.2% from 1.7%.

It will be interesting to see whether the reduced consumer spending, low business growth and spiralling fuel costs will cause Treasury to revise collection targets downwards.

Mike Teuchert is national head of taxation at Mazars