The National Treasury and the South African Revenue Service have published an overview of tax revenue collections and tax return information for the 2013 to 2016 tax years, as well as the 2012/13 to 2016/17 fiscal years.
The data showed that revenue from personal income tax (PIT), as a percentage of total tax revenue, increased from 29.6% in 2007/08 to 37.2% in 2016/17 with a compound annual growth rate (CAGR) of 10.8%, and a proportion of 8.4% of GDP over this period.
Tax revenue collected amounted to R1.144 trillion, growing year-on-year by R74.1 billion (6.9%) mainly supported by PIT which grew by R36.6 billion (9.4%), SARS said.
“This robust performance allowed government to offer large scale tax relief to all South Africans. This is despite the fact that the minimum tax thresholds for taxpayers below the age of 65 has increased from R40,000 in the 2007 tax year, to R73,650 in the 2016 tax year.
“Furthermore, for those who are 65 – 74 years, the minimum tax threshold increased from R65,000 to R114,800, and those who are 75 years and older the threshold increased from R104,261 in the 2012 tax year, when it was introduced, to R128,500, the revenue service said.
Despite tough economic conditions in which GDP increased from 0.5% to 0.7%, the Tax-to-GDP ratio stabilised at 26.0% from 2015/16, slightly below the peak of 26.4% achieved in 2007/08;
A demographic and geographic analysis of the assessments of the taxpayers who had been assessed as at the end of June 2017 revealed the following results:
- 1,928,707 (40.2%) of assessed taxpayers were registered in Gauteng;
- 623,715 of assessed taxpayers lived in the Johannesburg Metro and were taxed on an average taxable income of R424 083;
- 1,293,364 (26.9%) of assessed taxpayers were aged 35 to 44 years; and
- 2,645,855 (55.1%) of assessed taxpayers were male taxpayers; 2,154,489 (44.9%) were female.
Net VAT collections totalled R289.2 billion and grew by 2.9% compared to the previous year. Domestic VAT, which amounted to R321.5 billion, grew by 8.1% and was the key driver for the aggregate growth in net VAT.
VAT refunds totalled R181.6 billion and grew by 8.7%, SARS said.
Revenue collected from import taxes, Import VAT and Customs Duties declined by 1.0% and 1.5% respectively against the prior year. Subdued growth levels of merchandise imports, resulting from currency-driven high import costs and muted domestic activity, diminished the overall demand for consumption and capital goods.
Some of the main highlights SARS achieved over the past decade:
- Tax revenue collected all but doubled in 10 years. It increased from R572.8 billion in 2007/08 to R1.144 trillion in 2016/17, growing by R571.3 billion. This is a CAGR of 8.0% for the nine-year period prior to 2016/17.
- The total revenue collected for the fiscal years, from 2007/08 to 2016/17, amounted to R8.13 trillion.
- Net value-added tax (VAT) collections have been the second largest contributor to total tax revenue in the past 10 years. On average, net VAT accounted for 25.9% of total tax revenue, with net VAT collections comprising 6.4% of GDP for the period.
- Corporate Income Tax (CIT) has been the third largest contributor to total tax revenue for the past decade. It briefly surpassed VAT in 2008/09, but slipped back after the global financial crisis, which affected the profitability of companies.