{"id":753075,"date":"2024-02-20T10:20:00","date_gmt":"2024-02-20T08:20:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=753075"},"modified":"2024-02-20T11:44:22","modified_gmt":"2024-02-20T09:44:22","slug":"pain-and-gain-for-kieswetter","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/753075\/pain-and-gain-for-kieswetter\/","title":{"rendered":"Pain and gain for Kieswetter"},"content":{"rendered":"\n<p>The South African Revenue Service has been buoyed by an improvement in the nation&#8217;s employment rate, but declining import VAT and customs duties have hurt the taxman. <\/p>\n\n\n\n<p>According to PwC&#8217;s latest Economic Outlook, corporate income tax (CIT) collections have performed better than previously thought, with a 10.4% year-on-year increase in August 2023 &#8211; an important month as companies with February year-ends start making their first provisional tax payments. <\/p>\n\n\n\n<p>However, December \u2013 which reflects provisional taxes from companies with a December year-end \u2013 was a disappointing month and saw a 14.2% y-o-y decrease in receipts, with many embattled mining companies having December year-ends. <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"RQ8X8hTEqs\"><a href=\"https:\/\/businesstech.co.za\/news\/business\/752875\/4300-job-losses-on-the-cards-for-south-africa\/\">4,300 job losses on the cards for South Africa<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;4,300 job losses on the cards for South Africa&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/business\/752875\/4300-job-losses-on-the-cards-for-south-africa\/embed\/#?secret=4ZD7g39L7x#?secret=RQ8X8hTEqs\" data-secret=\"RQ8X8hTEqs\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p><br>Data from Stats SA showed that mineral sales dropped by 10.3% in 2023, which has a serious impact on company profits and tax dues. <\/p>\n\n\n\n<p>PwC expects CIT collections to be around R300 billion in the current financial year, which aligns with the 2023 Medium Term Budget Policy Statement (MTBPS) estimates. <\/p>\n\n\n\n<p>Personal income tax (PIT) is also expected to be supported by better-than-expected job creations in the year, as businesses have become more resilient against load shedding.<\/p>\n\n\n\n<p>PwC expects PIT of R650 billion in 2023\/24 compared to the R647 billion projects in the MTBPS 2023. <\/p>\n\n\n\n<p>&#8220;This positive news has been driven by higher-than-expected employment creation in 2023, with total employment increasing by 6.2% y-o-y in the third quarter of last year. Importantly, from a tax perspective, formal non-agricultural jobs increased 7.2% y-o-y in 2023Q3,&#8221; said the auditing firm. <\/p>\n\n\n\n<p>&#8220;The growth rate is much more than what could realistically have been expected given the state of the economy during the same period, as real GDP contracted by 0.7% y-o-y.&#8221; <\/p>\n\n\n\n<p>Basic salary\/wages paid to employees in the formal nonagricultural sector increased by 6.2% y-o-y in 2023Q3, while bonuses were up 9.5% y-o-y.<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Pain for the taxman <\/strong><\/p>\n\n\n\n<p>VAT collections are, however, expected to be below the MTBPS 2023 expectations of R446 billion at approximately R443 billion. <\/p>\n\n\n\n<p>Import VAT has been negatively affected by challenges in transporting goods into the country amid Transnet&#8217;s woes, with it expected to decline 5.4% y-o-y. <\/p>\n\n\n\n<p>Domestic VAT has held up relatively well, as retail sales increased 4.9% y-o-y in the September-November 2023 period.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"TC7HZ3VNOY\"><a href=\"https:\/\/businesstech.co.za\/news\/budget-speech\/751446\/divide-over-vat-hike-for-south-africa\/\">Divide over VAT hike for South Africa<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Divide over VAT hike for South Africa&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/budget-speech\/751446\/divide-over-vat-hike-for-south-africa\/embed\/#?secret=IpPr3BaH89#?secret=TC7HZ3VNOY\" data-secret=\"TC7HZ3VNOY\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>That said, the strained consumer conditions kept strong domestic VAT collections from completely compensating for the decline in import VAT.<\/p>\n\n\n\n<p>In addition, lower demand for solar panels and logistics challenges at ports also weighed on customs duties, which are expected to be roughly R5 billion less than the R8 billion forecasted in the MTBPS. <\/p>\n\n\n\n<p>&#8220;Alongside import VAT, these collections have been weighed down by a drop in renewable energy investment. Anecdotal evidence showed that by October last year, demand for solar power installations \u2013<br>and associated imports from China \u2013 were down 70%-80% compared to earlier in 2023,&#8221; PwC said. <\/p>\n\n\n\n<p>&#8220;This was due to pressure on household budgets from high interest rates, reduced load shedding, as well as a reported increase in counterfeit panels causing uncertainty among installers and consumers. Local<br>logistics challenges were also a big factor in weaker import duty numbers.&#8221;<\/p>\n\n\n\n<p>&#8220;In November 2023, vessels carrying more than 100,000 inbound containers \u2013 an estimated R7 billion worth of goods \u2013 were stuck outside the ports at Durban, Ngqura and Gqeberha, with expectations that it would take several months to clear the backlog.&#8221; <\/p>\n\n\n\n<p>With these delays, total imports dropped to R149.9 billion &#8211; a 9.0% y-o-y decline, with customs duties down 10.0%. <\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/finance\/752451\/south-africas-new-two-pot-retirement-system-the-crucial-points-you-need-to-know\/\" target=\"_blank\" rel=\"noreferrer noopener\">South Africa\u2019s new two-pot retirement system \u2013 the crucial points you need to know<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The taxman has had some boosts over the last financial year &#8211; but it is expected to take a blow from Transnet&#8217;s inefficiencies. <\/p>\n","protected":false},"author":95,"featured_media":753291,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26,2407,3246],"class_list":["post-753075","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline","tag-pwc","tag-sars"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/753075","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=753075"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/753075\/revisions"}],"predecessor-version":[{"id":753293,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/753075\/revisions\/753293"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/753291"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=753075"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=753075"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=753075"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}