Mining wage

Public payrolls, state-owned enterprises and inflation worry the Treasury as it faces a tough year ahead

Head of the National Treasury Budget Office, Edgar Sishi.

This year will require a difficult balancing act for the National Treasury’s budget office, its biggest headache currently being rising inflation and global interest rates.

Input costs for commodity exporters – who were responsible for unexpectedly collecting windfall taxes in the prior fiscal year – are rising. Thus, the repetition of this tax windfall is threatened each day that world prices rise. On the other hand, rising global interest rates mean the government faces higher debt servicing costs than last year.

“You will recall that in 2021, one of the main contributors to South Africa’s recovery, which was stronger than expected, was due to a favorable external environment. less favorable, it’s a problem for the local economy and it’s a problem for the tax authorities,” said the head of the national treasury’s budget office, Edgar Sishi.

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