The South African Revenue Service (SARS) collected R647.2 billion in tax revenue – R2 billion more than what was targeted in the 2011 budget, Finance Minister Pravin Gordhan said on Friday.
“Positive economic growth over successive quarters in 2010 and a modest recovery in revenue indicate that our economy is regaining its growth momentum,” Gordhan said of the preliminary outcome of revenue collection for 2010/11 fiscal year.
Gordhan said he expects tax revenues to continue improving.
The figure represents nominal growth in revenue of 12.6 percent more than the previous fiscal year.
“The preliminary spending outcome of R891.3 billion is 0.2 percent of GDP lower than anticipated in the 2011 budget. Combined with higher than anticipated revenue, the preliminary budget deficit is 5 percent of GDP – 0.3 percent lower than in the 2011 budget,” he said.
Of Personal Income Tax, the year-on-year growth of R21.8 billion was driven by wage settlements that were in excess of inflation (with wage settlements estimated at 8.2 percent in 2010 as opposed to 2009’s 9.3 percent).
The main factors in improved growth were attributable to growth in the finance, public administration and agencies sectors. However, put against the revised 2011 budget personal income tax was below by R1.1 billion.
Corporate Income Tax collections declined by R1.5 billion, with positive signs going forward being the recovery in demand, commodity prices as well as overall growth in gross operating surplus indicating improvements in business profitability.
“There are healthy signs,” the minister said.
VAT collection at R184.2 billion showed an improvement of R36.2 billion, while on refunds, the revenue service has introduced stricter validation rules in order to eliminate the abuse of refunds. Refunds in 2010 were R5 billion below the revised estimate.
Government expenditure amounted to R891.3 billion, which is R6.1 billion lower than the revised estimate published in the 2011 budget review.
SARS expressed concern at the level of compliance among particularly high income earners, with SARS having identified about 2 800 people who meet the criteria of high income earners.
These individuals, said SARS Commissioner Oupa Magashula, will receive greater scrutiny in the coming year.
“During the next financial year, SARS will therefore be focusing its attention on the 200 most non- compliant high net worth individuals,” said Magashula.
The SARS Large Business Centre investigated 14 270 large corporate and non corporate taxpayers for underpayments of provisional tax resulting in revenue of R4.9 billion.
Revenue target for 2011/12 is R741.6 billion.
Gordhan also thanked SARS staff for a job well done, while also thanking tax compliant South Africans.
“South Africans can be proud of an effective system,” said Magashula. – BuaNews
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