Kicking the can down the road

In this edition of the Macro Review – ‘Kicking the can down the road’ we look at the 2020 Budget delivered by the Minister of Finance, Tito Mboweni on 26 February 2020.
Kicking the can down the road

Key takeaways:

  • Budgeted revenue for 2020/21 is R1.58 trillion or 29.2% of gross domestic product (GDP), while budgeted expenditure is R1.95 trillion (36% of GDP).
  • The budget deficit is forecast at an estimate of 6.8% of GDP in 2020/21, 6.2% in 2021/22 and 5.7% in 2022/23.
  • Economic growth is expected at 0.9% in 2020, forecast to rise to 1.3% in 2021 and 1.6% in 2022.
  • Gross national debt is estimated to approach R3.56 trillion or 65.6% of GDP in 2020/21.
  • The Value Added Tax (VAT) remains unchanged and there is a marginal cut in Personal Income Tax (PIT), while ‘sin’ (alcohol, tobacco) and environmental (carbon, plastic) taxes are up.
  • The annual limit on contributions to tax-free savings accounts is up from R33 000 to R36 000.
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