South Africa collects R814bn in revenue


3 April 2013

The South African Revenue Service (Sars) collected more than R814-billion in taxes for 2012/13, beating projections forced downwards by a tough economic climate, in what Finance Minister Pravin Gordhan nonetheless described as a “remarkable achievement”.

Releasing the revenue service’s preliminary tax collection results in Pretoria on Tuesday, Gordhan said that while the total collection was R12-billion lower than the projection made in February 2012, it was R4-billion (0.5%) more than the revised projection he made in his National Budget in February 2013.

Sectors of the economy that recorded higher than average growth include real estate, finance and business services. This raised the corporate income tax to just over R161-billion, an improvement of R7-billion when compared to the R153-billion collected in 2011/12.

An increase of 8.8% in the compensation of employees also contributed positively to the growth in personal income tax.

Personal tax collection grew by R25-billion to R276.8-billion compared to the R251- billion Sars managed to collect in the previous financial year, while value added tax accounted for R215-billion.


‘Continued improvements in tax revenue’


“This is an admirable revenue performance,” Gordhan said, noting that the weak global environment and a number of domestic supply side disruptions, particularly in the mining sector, had shrunk economic growth from 3.5% in 2011 to 2.5% in 2012.

This decline in economic growth had negatively affected job creation and corporate profits, leading to a downward revision of revenue estimates.

The preliminary revenue outcome was in line with the economic performance of the country and reinforced expectations for continued improvements in tax revenue as the economy continued to recover over the medium term, Gordhan said.

“In addition, while under-spending by government departments and agencies is a concern for service delivery, there are no indications that any department or agency has significantly overspent, illustrating the will and administrative strength to ensure that the integrity of the fiscus is not undermined by the departments spending more than they are allocated.”

Gordhan sent a stern warning to tax evaders, saying authorities would apply a zero tolerance approach against corruption and non-compliance. Those who stole from the state and effectively from tax payers should be treated as “outcasts”.

“They should know that they don’t have a place in our society and will be treated as outcasts.”

Sars Commissioner Oupa Magashula said that tough economic conditions had made it difficult for Sars to collect as much tax as it might otherwise have. “We are operating in a very tough environment and considering all of that, we have done well,” he said.

The positive thing, he said, was that the Sars debt book came down by R6-billion this past financial year, an indication that more taxpayers were complying with their obligations.

Magashula said while the outlook remained tough, Sars’ revenue collection target for next year would be set at R819-billion.