[South Africa] SARS R15billion below tax collection target

Preliminary results show that the South African Revenue Service (SARS) has collected an amount which falls R15billion short of their tax collection target, Business Tech reports.

The amount SARS collected totals R1.287trillion. The 2019 budget estimate was R1.302 trillion. If these preliminary figures are correct, the result will be a deficit of R14.6billion (-1.1 per cent).

Revenue collections have been falling since 2015. Poor economic growth and weak administration were thought to be at fault. Last November President Cyril Ramaphosa fired Tom Moyane as revenue service boss to address the issue, according to reporting by Reuters.

SARS broke down the figures saying, “The main sources of revenue that contributed to the R1 287.6 billion collected were Personal Income Tax (PIT), which contributed R493.8 billion (38.3 per cent), Value-Added Tax (VAT) contributing R324.6 billion (25.2 per cent), Company Income Tax (CIT), which contributed R214.7 billion (16.7 per cent) and Customs duties contributed R55.2 billion (4.3 per cent).”

Overview

• PAYE collections for the year increased by 7 per cent to R477.4billion

• Double-digit growth was seen in Domestic Value-Added Tax (VAT) from May 2019. This due to the benefits of the 1 percentage point increase in the VAT rate. The result was strong growth rates in the large business and SMME segments of 9.8 per cent and 14.8 per cent respectively

• Full-year collections yielded R378.8billion of which 83 per cent was received via the eFiling system

• Company Income Tax (CIT) collections contracted by 2.5 per cent. The contraction following multiple CIT refunds which were paid to the large business segment and relate to multiple periods that were under audit review, as well as ongoing efforts to clear the IT credit book

• Regarding Personal Income Tax (PIT) growth, provisional tax payments slowed from 37.5 per cent in August 2018 to 18.4 per cent in February 2019 due to the non-repeat and/or lower declaration of capital gains compared to the previous year

• Import taxes had strong growth of 14.0 per cent for the first three fiscal quarters. During some months of the final fiscal quarter, transactional data and merchandise imports did not meet expectations. Payments that are part of the 13th deferment statement exceeded all expectations

• The result was the overall outcome for Customs growing at 13.9 per cent. Just above the required growth rate

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Preliminary results show that the South African Revenue Service (SARS) has collected an amount which falls R15billion short of their tax collection target, Business Tech reports.

The amount SARS collected totals R1.287trillion. The 2019 budget estimate was R1.302 trillion. If these preliminary figures are correct, the result will be a deficit of R14.6billion (-1.1 per cent).

Revenue collections have been falling since 2015. Poor economic growth and weak administration were thought to be at fault. Last November President Cyril Ramaphosa fired Tom Moyane as revenue service boss to address the issue, according to reporting by Reuters.

SARS broke down the figures saying, “The main sources of revenue that contributed to the R1 287.6 billion collected were Personal Income Tax (PIT), which contributed R493.8 billion (38.3 per cent), Value-Added Tax (VAT) contributing R324.6 billion (25.2 per cent), Company Income Tax (CIT), which contributed R214.7 billion (16.7 per cent) and Customs duties contributed R55.2 billion (4.3 per cent).”

Overview

• PAYE collections for the year increased by 7 per cent to R477.4billion

• Double-digit growth was seen in Domestic Value-Added Tax (VAT) from May 2019. This due to the benefits of the 1 percentage point increase in the VAT rate. The result was strong growth rates in the large business and SMME segments of 9.8 per cent and 14.8 per cent respectively

• Full-year collections yielded R378.8billion of which 83 per cent was received via the eFiling system

• Company Income Tax (CIT) collections contracted by 2.5 per cent. The contraction following multiple CIT refunds which were paid to the large business segment and relate to multiple periods that were under audit review, as well as ongoing efforts to clear the IT credit book

• Regarding Personal Income Tax (PIT) growth, provisional tax payments slowed from 37.5 per cent in August 2018 to 18.4 per cent in February 2019 due to the non-repeat and/or lower declaration of capital gains compared to the previous year

• Import taxes had strong growth of 14.0 per cent for the first three fiscal quarters. During some months of the final fiscal quarter, transactional data and merchandise imports did not meet expectations. Payments that are part of the 13th deferment statement exceeded all expectations

• The result was the overall outcome for Customs growing at 13.9 per cent. Just above the required growth rate

OTHER STORIES THAT MAY INTEREST YOU

South Africa: The Big Pension Pot 

Navigating Travel In South Africa

South Africa: The Big Pension Pot