Generally, mineral taxes anchor the country’s tax receipts but for the 2023–24 fiscal year, the customs union revenues will take centre stage, rising to about P25 billion from P14.4 billion in the current financial year.
The latest forecasts are contained in draft Finance Ministry estimates made available after the recent budget speech by Finance minister, Peggy Serame.
According to the estimates, customs union revenues at P25 billion will account for about 31% of total revenues government expects for the upcoming financial year. The estimates are in line with information passed to BusinessWeek last month indicating a boom in Southern African Customs Union (SACU) revenues.
Finance ministry insiders previously told BusinessWeek that top SACU officials had met in South Africa in December where significant upward revisions were made to the quantum of revenue to be shared by member states, a fact confirmed by the latest estimates.
“The SACU revenues are based on expectations, but after the lockdowns, the regional economy has been recovering and there has been more economic activity, leading to more inter-SACU trade, hence this time, the receipts are more than expected,” BURS acting customs commissioner, Gaone Arieff, told BusinessWeek during a recent briefing.
The Finance ministry estimates, meanwhile, indicate that mineral taxes are expected to drop to P7.5 billion in the forthcoming financial year from P9 billion in the current.
The expected dip in mineral taxes is in line with other projections from the Finance ministry suggesting the mining industry as a whole will contract this year due to the anticipated slowdown in global economic activity.
Finance Ministry figures published at the same time as the recent budget speech projected that mining would contract by 0.1 percent this year, from an estimated eight percent expansion in 2022. Diamond trading activities, which have enjoyed high growth rates in the pandemic recovery, would also drop to seven percent expansion this year, from about 42% in 2022.
In her budget speech, Serame said going forward, much of the country’s growth would come from non-mining activities.
“The non-mining sector is estimated to grow, on average by five percent over the (next) two years, and is expected to generate about 35,000 new jobs across both the formal and informal sectors during this period,” Serame said in her budget speech.
