The South African Revenue Service (SARS) has managed to collect R1.216 trillion in the 2017/18 financial year.
Finance Minister Nhlanhla Nene made the announcement at a briefing on Tuesday morning.
“SARS collected a gross amount of R1451.0 billion which was offset by refunds of R234.3 billion, resulting in net collections of R1216.6 billion,” said Minister Nene.
The Minister was flanked by his Deputy Minister Mondli Gungubele and Acting SARS Commissioner Mark Kingon at the briefing.
The R1216.6 billion, which is a preliminary result and is subject to a final audit, falls short of the forecasted revised estimate announced by the Minister of Finance in the February 2018 Budget speech of R0.7 billion which is 0.06%.
Despite falling short of its target, the taxman said the collection represents a growth of R72.4 billion (6.3%) compared to the 2016/17 financial year.
The main sources of revenue that contributed to the R1216.6 billion were Personal Income Tax (PIT) at R462.5 billion (38.0%), Value-Added Tax (VAT) at R297.8 billion (24.5%), Company Income Tax (CIT) at R220.2 billion (18.1%) and customs contributed R49.4 billion (4.1%).
The 2017/18 financial year was characterised by distinct and clearly delineated growth patterns. Until December 2017, revenue in aggregate grew by 6.2% year-on-year.
“For the period December to February 2018, revenue growth, on a month-on-month basis accelerated to between 9.5% and 15.5%, strengthening aggregated year-on-year growth to about 7.3%,” said Minister Nene.
SARS attributed the strengthening of revenue growth during this three-month period to:
- An improvement in business confidence to levels last seen in 2015, resulting in improved profit outlook and hence provisional payments;
- Strengthening of commodity prices, which buoyed company income tax from especially the mining sector in December 2017;
- Purchasing Manager’s Index (PMI) which indicated a recovery in the manufacturing sector, which translated in improved company income tax (CIT) from this sector.
- The stronger currency towards the latter part of 2017 assisted companies with imports, which benefitted our trade taxes.
SARS said the slower recovery of consumer confidence resulted in lower domestic VAT. As a result, domestic VAT grew at a muted level of 4.5%, well below the 8.1% growth seen in the previous year.
However, business confidence is yet to translate into higher employment numbers and significant growth in the wage bill.
“As a result, Pay-As-You-Earn (PAYE), the largest contributor to the SARS tax portfolio, came in at 8.6% significantly below the 9.2% levels experienced in the prior two years,” said Minister Nene.
In March 2018, revenue collections on a month-on-month basis contracted, dropping down the aggregated yearly growth to 6.3%.
Dividend taxes contracted by R3.9 billion in relation to prior year. In the prior year, companies anticipated an increase in the Dividend Tax rate, which changed from 15% to 20% effective 22 February 2017 declared extra ordinarily high dividends.
“Due to the shorter business month in March, customs had to close their statements two days earlier than normal shifting about R1.8 billion to the next financial year,” said Minister Nene.
Domestic VAT from large business came in flat in March 2018, deviating from the growth trajectory established during the course of the year
Minister Nene said the majority of taxpayers pay their taxes diligently and thanked them for their and contributions.
“Let me thank all those who paid their taxes. It is critical that taxpayers have full confidence that every cent will be spent well,” he said. – SAnews.gov.za
Latest posts by Alan Straton (see all)
- As a Hetrosexual Male Will You Take part in This Experiment? - 22 November 2019
- Creepy or Not? - 22 November 2019
- Repo rate remains unchanged - 21 November 2019
- 8 Year Trade Agreement to Generate over R30 Million Sales Revenue for Rural Farmers - 21 November 2019
- Understatement of the Year; “SOEs remain under pressure” - 20 November 2019