The SA Revenue Service (SARS) collected a total of R986,4-billion for the 2014/15 financial year, Finance Minister Nhlanhla Nene announced on Wednesday.
While lower commodity prices, low economic growth, labour disputes and electricity supply represented challenges to revenue collection, SARS had over-performed expectations, Nene told journalists in Pretoria.
“These factors notwithstanding, revenue growth this fiscal year just ended and remained resilient and I’m informed that it grew 9.6% as the economy slowed.”
Of the R986,4bn, R353,8-billion came from personal income tax (PIT), which came in at 0,9% above the revised estimate in the 2015 budget of R350.7bn. PIT collected over the last financial was 13,8%, or R42,9-billion higher than that collected in the previous financial year.
Corporate income tax was 4,1% higher than in 2013/14, coming in at R186,9-billion. This was R2,3-billion or 1,2% higher than the revised 2015 budget estimate.
Total collections of value added tax (VAT) came in at R261,1bn, 0,2% higher than expected in the revised 2015 budget estimate, with R23,4-billion more collected in VAT this year than in the previous financial year, representing a 9,9% improvement.
Robust collections performance
Government had revised its tax collection target from R993.6bn, announced in the 2014 budget and based on 2,9% gross domestic product (GDP) growth, to R979-billion with GDP growth revised to 1,4% in the February 2015 budget.
“This was as a result of tentative global economic performance and domestic supply constraints. The latter included the impact of strikes in the mining and manufacturing sectors as well as prospects of significant load shedding,” the minister says.
“Furthermore, the slump of the oil price in the second half of the year reduced the profit outlook for fuel companies, while imports overall were in a downward spiral.”
Realising the difficult economic environment, Nene says SARS commissioner Tom Moyane established a comprehensive revenue plan to co-ordinate all activities linked to overall revenue management. The revenue plan included the establishment of national and regional coordinating committees and provided strategic guidance to SARS.
“The robust collections performance from SARS is expected to have a positive impact on the fiscal framework,” Nene says.
Impact on fiscal framework
He pointed towards improved compliance, to the value of R22-billion, as one of the reasons that revenue collection had continued to remain robust in trying economic times.
“The combination of compliance enhancements by SARS, policy reform and to an extent the recovery of customs taxes provided for the successful revenue collection outcomes,” the minister says.
Moyane, appointed in September last year by President Jacob Zuma, says revenue collection was a function of how the economy was functioning and performing.
“The outstanding returns and revenue numbers you [Nene] have just announced are just a testimony that South African tax payers have spoken.
“We needed to ensure everyone across SARS was mobilised to meet our revenue challenges. In the last three months, we’ve had torrid but exciting and uplifting moments which has allowed me a window into SARS.”
He expressed his appreciation to every single South African taxpayer who contributed towards revenue collection, since without them SARS’ target would not have been achieved.
Asked how exactly revenue collection would impact on the fiscus going forward, Nene says it was too early to judge.
“The numbers indeed will have a positive impact on our fiscal framework but we wouldn’t want to [say] what that impact is right now. These are preliminary numbers. By June we will be in a position to work out what the impact of this performance is going to be on our forecasts and projections,” he says.
Source: Adam Wakefield, Fin24