By Katya Stead for Fin24
The South African Revenue Service (SARS) announced on Monday afternoon that it had collected R1 287.6bn in tax for the financial year ended March 31 2019, some R14.6bn less than what was estimated in the revised Budget.
The tax agency’s acting head, Mark Kingon, made the announcement in Pretoria. The 2019 revised Budget estimated a tax haul of R1 302.2bn for the past financial year.
“It should be noted that these are preliminary results, which will be subject to detailed financial reconciliation and a final audit.” the agency said in a statement.
While SARS collected more tax in total in the year ended March 31, it also paid out more in refunds.
The revenue collection agency said that gross collections grew by 8.6% year-on-year. Refunds recorded an even more impressive annual growth of of 22.7%.
“The gross amount collected is R1 575.4bn, which was offset by refunds of R287.8bn, resulting in net collections of R1 287.6bn. The net revenue outcome of R1 287.6bn represents a growth of R71.2bn (5.8%) compared to the 2017/18 financial year.”
This follows the announcement by the minister of finance during the mini budget that the VAT refund envelope would be increased to allow the release of refunds from the fiscus back into the economy.
VAT refunds for the year totalled R229.2bn, an increase of R38.1bn, or 19.9%, over the previous year.
Speaking at the results release on Monday, Mamiky Leolo, acting group executive of the tax, customs and excise unit at SARS, said the shortfall was near historic proportions. “This is the highest decline we’ve seen since the Great Depression. The deviation is R14.6 billion. I think in terms of the numbers it is a bit of a shock. But statistically, we are 1.1% off. We’ve done a very good job under tough circumstances.”
Despite the shortfall, the agency is targeting a total of R1 422bn in tax revenue collection for the 2019/20 year.