SA warns of possible tax hikes

"At that stage (February's budget) we didn't see any need to increase taxes, but if the economic and revenue position does not improve, we will have to look at that question again," he told parliament's finance committee.

An economic downturn last year hit government revenue, worsening the budget deficit, although a bigger-than-expected tax take in the 2009/10 financial year put the shortfall at 6.8 percent of GDP, less than the forecast 7.3 percent. South Africa kept spending up despite last year's recession to help the economy recover but has vowed to gradually cut the deficit and reduce debt.Lesetja Kganyago, the director-general of the National Treasury, said the budget deficit was expected to remain relatively large for the next three years due to a still weak global economy that may also curb local growth.