Revenue collection has remained resilient despite the economic challenges the economy is facing. The South African Revenue Services has reported growth of 7.9% in net revenue collected to the amount of almost R1.7 trillion.
Sars says this was achieved as a result of continued focus on compliance-related activities.
Despite several economic challenges, revenue collected has grown.
Sars says the pace of economic recovery from the COVID-19 devastation in the past year was disrupted by the repercursions of the war in Ukraine, the floods in KwaZulu-Natal, blackouts and logistics challenges.
The agency says blackouts have led to revenue loss of about R60 billion, as it affects the overall profitability and constrains business growth.
Despite the disruptions, growth was recorded in all tax types. In the past financial year, gross revenue before refunds were paid was R2 trillion. Tax refunds totalled R381 billion, leaving nearly R1.7 trillion in the kitty.
SARS collects record tax revenue: Edward Kieswetter
Personal income tax contributed the lions’ share at 35.7% followed by value added tax at 25% company income tax at 20.6%. And customs and other taxes at 18.7%.
Sars Commissioner, Edward Kieswetter says, Sars gas grown its gross revenue by 10%.
“Notwithstanding the challenges of load shedding and a constrained economy, Sars has grown its gross revenue by about 10% in a situation where nominal GDO is less than 5%. Secondly, huge refunds that stimulate the economic activity and thirdly, the dividend from the focused compliance activities by the Sars.”
National Treasury says the collected revenue will go a long way in assisting government to meet its obligations. The target for the current financial year is higher at R1.78 trillion, despite the weak economy and the blackouts as well as other structural constraints.
National Treasury Acting Director General, Ismail Momoniat says, he is confident Sars will still do it’s best.
“I think it’s going to be tough because if you are going to have low growth, and it does seem, if you look at SARB, IMF, they have even bleak projections and it depends on how much load shedding we are going to have. That’s the challenge we have to face, because the difficulty we face is that once we have set the revenue target, the estimate, that the minister set in the February Budget this year, the expenditure level is set, if you don’t, then you just get higher deficit, more borrowing. That’s the risk that we face. But I’m confident that Sars will still do the best that it can, and of course, the economy is a determining factor of what the revenue will be.”
Sars says its targeted compliance interventions yielded R227 billion. The interventions include debt collection, a focus on criminal and illicit activities as well as declaration compliance among large businesses.
The agency says it worries about compliance in the small and medium business space, with about 60% compliance in this space.
