#SpecialBudget2020: Will finmin Mboweni’s emergency budget meet expectations?

Finance Minister Tito Mboweni's warning of a bleak budget has set the tone for what is to come from Wednesday's speech. The National Treasury recently secured a one billion dollar loan from the New Development Bank to address the urgent health and social needs exacerbated by the COVID-19 pandemic. While this injection of funds may offer some relief, experts caution that there is still a significant shortfall to bridge. Bernard Sacks, Tax Partner at Mazars, highlighted the Commissioner of the South African Revenue Service's prediction of a 285 billion Rand tax deficit. The increased expenditure in crucial sectors like healthcare, education, and social assistance further complicates the financial scenario for the government. The markets reflected nervousness leading up to the budget announcement, with South African bonds retreating over the past few weeks despite global strength. Nolan Wapenaar, Co-Chief Investment Officer for Anchor Capital, noted that the market is bracing for a substantial budget deficit, with expectations hovering around 14% or higher. The focus has shifted to how the government plans to navigate this fiscal crisis and steer the economy back on track. Amidst speculations about potential tax amendments, Sacks suggested that lowering corporate tax rates could attract more foreign investments and stimulate economic growth. He emphasized the need for competitive tax rates to bolster employment and overall revenue generation without burdening already strained taxpayers. As South Africa grapples with the economic fallout of the pandemic, the call for strategic financial planning and sustainable recovery measures has never been more urgent. The upcoming budget announcement on Wednesday will be closely scrutinized for insights into the government's roadmap for economic revival and stability.