SARS hits R1 trillion tax mark for a second consecutive year
For the second successive year, the South African Revenue Service (SARS) broke the trillion rand mark by collecting R1.14 trillion in tax for the 2016/2017 financial year.
For the financial year, net revenue grew by 7.0% contrasted with a growth in refunds of 9.5% year on year.
SARS noted that the 2016 calendar year was characterised by subdued growth with global growth easing to 3.1% in 2016, from 3.2% in 2015.
It said that a number of global trends impacted negatively on South Africa’s economy. Real Gross Domestic Product (GDP) growth for 2016 was revised down from 0.9% in February 2016, to 0.5% in the February 2017 budget (Recently StatsSA published the official view for real GDP growth in 2016 at 0.3% and nominal growth of 7.1%).
Looking ahead, SARS said it expects the domestic economy to improve to GDP growth levels of about 1.2% based on emerging trends which include:
- Commodity prices which have rebounded;
- The relatively stable international Rand exchange rate which recovered from its rapid depreciation last year;
- Production stoppages associated with industrial disputes have been comparatively low; and
- Heavy rainfall realised in the past months in South Africa bringing relief to the agricultural sector.
“These green shoots will assist SARS in the revenue collection drive towards the attainment of the printed estimate for the 2017/18 financial year of R1.266 trillion, a required uplift of 10.5% over the current year,” it said.
“It should be cautioned that this strong revenue growth outlook for the next financial year was developed when a more rapid economic recovery, than what is currently the case, was anticipated.”
Tax type analysis
Personal Income Tax (PIT), Corporate Income Tax (CIT) and VAT along with Customs and Excise, in aggregate remained the largest sources of tax revenue and represented about 94.5% of total tax revenue collections.
The largest contributor was PIT, which accounted for 37.2% of total revenue, followed by net VAT contributing 25.2% and CIT collections 18.1%. Customs and Excise collections contributed 27.0% to collections.
PIT collections of R426 billion were higher against the previous year by R36.7 billion (9.4%) but lower than the estimate by R0.9 billion (-0.2%), mainly due to PAYE (Employees’ tax) payments.
In aggregate SARS paid out R222.4 billion in refunds. A total of R23 billion was paid in PIT refunds, reflecting a 10.7% increase on prior year.
CIT refunds totalled R13 billion, representing about R2.2 billion (20.7%) increase in pay outs compared to prior year.
Read: SARS will be investigated for not paying out tax returns
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