How the government spends every R100 of taxpayers’ money in South Africa
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Elizabeth Makhafola – STATS SA Director for National and provincial government institutions talks about Stats SA has published its annual breakdown of government spending for the 2021/22 financial year, showing exactly where taxpayers’ money is going.
This year marked the first time that government spending exceeded the R2 trillion mark, Stats SA said, with total budget allocations at R2.1 trillion.
Large increases in expenditure were recorded for social protection, health, and general public services as the country battled the Covid-19 pandemic, it said. At the same time, total revenue declined on the back of lower taxes received.
Stats SA’s breakdown of finances for the year covers 701 institutions that include national and provincial government departments, municipalities, extra-budgetary accounts and funds, and higher education institutions.
The general government recorded a decline in total revenue in 2020/21, mainly due to decreased tax collection, it said.
Total tax revenue dropped by R109 billion (-7.4%) from R1.47 trillion in 2019/20 to R1.36 trillion in 2020/21. Tax revenue was down across the board, with the most significant decreases recorded by individual tax (down R41 billion), excise tax (down R22 billion), value-added tax (down R16 billion) and business tax (down R13 billion).
Other taxes recorded a decrease of R17 billion.
The decline in taxes paid by businesses was mainly due to lower economic activity as a result of the pandemic and subsequent lockdowns. The decline in excise taxes was mainly associated with the lockdown bans on the sale of alcohol and tobacco.
Despite lower revenues, social spending increased significantly during the year. Total expenditure increased by 7.1% (or R140 billion) between 2019/20 and 2020/21, from R1.96 trillion to R2.10 trillion.
Social protection, general public services and health were the biggest factors behind the increase.
Spending on social protection rose by R84 billion, from R286 billion to R370 billion. Social protection involves government intervention that is intended to mitigate the impact of social risks on households and individuals. This includes the payment and administration of sickness and disability, family and children, old age and unemployment grants.
Two projects – the Social Relief of Distress (SDR) grant and the Temporary Employee/Employer Relief Scheme (TERS) – were introduced to minimise the socio-economic impact of the pandemic. These projects contributed to the R84 billion increase in social spending, Stats SA said.
This year marked the first time that government spending exceeded the R2 trillion mark, Stats SA said, with total budget allocations at R2.1 trillion.
Large increases in expenditure were recorded for social protection, health, and general public services as the country battled the Covid-19 pandemic, it said. At the same time, total revenue declined on the back of lower taxes received.
Stats SA’s breakdown of finances for the year covers 701 institutions that include national and provincial government departments, municipalities, extra-budgetary accounts and funds, and higher education institutions.
The general government recorded a decline in total revenue in 2020/21, mainly due to decreased tax collection, it said.
Total tax revenue dropped by R109 billion (-7.4%) from R1.47 trillion in 2019/20 to R1.36 trillion in 2020/21. Tax revenue was down across the board, with the most significant decreases recorded by individual tax (down R41 billion), excise tax (down R22 billion), value-added tax (down R16 billion) and business tax (down R13 billion).
Other taxes recorded a decrease of R17 billion.
The decline in taxes paid by businesses was mainly due to lower economic activity as a result of the pandemic and subsequent lockdowns. The decline in excise taxes was mainly associated with the lockdown bans on the sale of alcohol and tobacco.
Despite lower revenues, social spending increased significantly during the year. Total expenditure increased by 7.1% (or R140 billion) between 2019/20 and 2020/21, from R1.96 trillion to R2.10 trillion.
Social protection, general public services and health were the biggest factors behind the increase.
Spending on social protection rose by R84 billion, from R286 billion to R370 billion. Social protection involves government intervention that is intended to mitigate the impact of social risks on households and individuals. This includes the payment and administration of sickness and disability, family and children, old age and unemployment grants.
Two projects – the Social Relief of Distress (SDR) grant and the Temporary Employee/Employer Relief Scheme (TERS) – were introduced to minimise the socio-economic impact of the pandemic. These projects contributed to the R84 billion increase in social spending, Stats SA said.
