The South African government has extended by another year COVID-19 relief to distressed companies and individuals following a R182 billion windfall in tax revenue, Finance Minister Enoch Godongwana said on Wednesday.
Presenting his 2022 national budget before parliament, Godongwana said the government collected R182b more than what was initially projected. This was on the back of an improvement in commodity prices on global markets.
The government has decided to use R44b of the windfall to extend the COVID-19 distress grant under which individuals are receiving R350 per month each, while companies receive various amounts depending on the sector and their peculiar needs.
The remainder of the windfall would go towards narrowing the budget deficit and supporting job creation projects, the minister said.
“The improved revenue performance is not a reflection of an improvement in the capacity of our economy. As such, we cannot plan permanent expenditure on the basis of short-term increases in commodity prices,” Godongwana warned.
He revised the country’s economic growth downwards to 2.1 percent in 2022 from 4.8 percent in 2021. It is projected to then average 1.8 percent between 2023 and 20225, according to Godongwana.
He revealed that the budget deficit is seen narrowing to 4.2 percent of gross domestic product in 2024/25 from 5.7 percent in 2021/22.
JN/APA