PwC South Africa Economic Outlook | February 2024
PwC South Africa Economic Outlook | February 2024
We’re pleased to share our second South Africa Economic Outlook report for 2024.
By PwC
We’re pleased to share our second South Africa Economic Outlook report for 2024.
PwC South Africa published its Budget 2024 predictions on February 13. This edition of our South Africa Economic Outlook takes a closer look at selected economic and tax topics ahead of the budget speech on February 21. A key observation is that PwC expects the finance minister to announce that the National Treasury will go ahead with a planned increase in taxes towards raising an additional R15 billion (c. $790 million) in revenue for the 2024/2025 fiscal year.
By our estimates, to raise an additional R15 billion in tax revenues would require increasing Personal Income Tax (PIT) rates by 0.5 percentage points across all tax bands, or one percentage point on those earning more than R500,000 (c. $26,347) a year. Alternatively, the National Treasury could look at increasing the Value-Added Tax (VAT) rate by 0.5 percentage points to 15.5%.
We estimate that the 2023/2024 fiscal year will see a budget deficit equal to 5.1% of GDP. Looking ahead at the 2024/2025 fiscal year, the Medium-Term Budget Policy Statement (MTBPS) 2023 pencilled in a deficit equal to 4.6% of GDP, while we project a figure equal to 4.9% of GDP. Our number is larger (more conservative) due to a more subdued outlook on economic growth.
Key content in this report includes:
Global fiscal risk: Strain on public finances are detracting from SDGs, industrial and climate policies.
Local tax trends: PIT collections better than forecast, offset by lower import VAT and customs duties.
Budget deficit outlook: Tax increases likely in 2024/2025 amidst a continued large fiscal shortfall.
Increasing tax compliance: PwC survey shows it has become easier to comply with SARS tax obligations.
How PwC assists our clients with tax compliance and measuring their total tax impact.
You can explore further insights by visiting the South Africa Economic Outlook webpage. For ease of access, we have also attached a soft copy of the report.
If you have any questions or would like to discuss any of the topics explored in the report, please don’t hesitate to reach out to us.
Contact us
Lullu Krugel
Partner and Chief Economist
PwC South Africa
+27 (0) 82 708 2330
Christie Viljoen
Senior Manager and Economist
PwC South Africa
+27 (0) 82 472 8621