Tax boss Edward Kieswetter has explained the reasons for the expected tax revenue shortfall.

One of the key insights from last week's Medium-Term Budget Policy Statement was an undercollection of revenue. However, as South African Revenue Service (Sars) commissioner Edward Kieswetter points out, the R56.8-billion shortfall related to net and not gross revenue collection, which was just more than R2-trillion for 2022/23.

The two biggest culprits behind the difference between gross and net revenue collected were the nation's biggest bugbears: rolling blackouts and the underperforming freight rail system.

The reality, Kieswetter points out, is that year-on-year gross revenue collection was up 7%, but net revenue collection contracted significantly on the back of several factors directly linked to rolling blackouts and the failing freight rail system.

Major factors affecting in-year revenue collection in the first half of 2023/24 included significantly reduced mining sector profitability. Provisional corporate tax collections from mining companies plunged 55%, or R24.6-billion, as lower commodity prices, weaker global growth, increased power cuts and logistical constraints weigh heavily on the sector.

However, Kieswetter says that to attribute the entire fall in net revenue collection to the mining sector is "over simplistic".

Rather, he says, the decline in corporate income tax can be attributed more broadly to increased input costs as a result of...