JOHANNESBURG, Sept.10 (Xinhua) -- South African Finance Minister Nhlanhla Nene on Monday said the falling of the country into technical recession will have negative consequences in the country, including low revenue collection.
He was speaking at the 2018 Tax Indaba in Johannesburg.
Last week Statistics South Africa announced that the country is on technical recession following the gross domestic product (GDP) contraction by 0.7 percent in the second quarter this year.
"Lower tax collections have serious consequences and can impact everyone, whether it be through lower expenditures on education or health, or through increases in tax rates to make up for shortfall," Nene said. "The ability of a government to borrow at reasonable interest rates is also dependent on its ability to collect taxes."
He warned that any under-performance in our tax revenues will have wide repercussions. Tax collection have declined in South Africa in the last two fiscal years. The government had to raise income tax rates, taxes on capital gains and dividends and subsequently raised the value-added tax rate.
He warned against corruption and called for good governance and ethical leadership.
