A Remarkable Achievement in Tax Collection

A Remarkable Achievement in Tax Collection

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The South African Revenue Service has exceeded its target by R4 billion, and collected more than R814 billion in taxes for the 2012/13 fiscal year.

Finance Minister Pravin Gordhan described this as a “remarkable achievement”.

This is the first set of results after the introduction of SARS’s new five-year Compliance Programme, introduced last year to help SARS achieve high levels of compliance with tax and customs legislation.

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 collected in 2011/12 financial year.

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 get out of tax payers in the previous financial year, while Value Added Tax accounted for 215 billion.

 

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While the total collection is R12 billion lower than initial expectation made during the 2012 Budget, Gordhan had nothing but words of praise for the country’s tax collectors.

Poor economic growth makes it hard to collect

“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 downward revision of revenue estimates.

SARS commissioner Oupa Magashula said tough economic conditions were making it difficult for SARS to collect as much tax as it could.

“We are operating in a very tough environment and considering all of that, we have done well,” he said.

Zero tolerance of tax evasion

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”.

Magashula said while the outlook remained bleak, SARS revenue collection target for next year would be set at R819 billion.

Alison Job
Alison Job holds a BA English, Communications and has extensive experience in writing that spans news broadcasting, public relations and corporate and consumer publishing. Find her at Google+.