Sars collects more than R2 trillion and pays out record R381 billion

Sars collected and paid out the largest amounts ever since its inception in the past financial year. It collected R2.068 trillion and paid out R381.1 billion according to its preliminary revenue collection results for the 2022/2023 financial year, reflecting a significant growth trajectory over the past few years.

The net collection after payment of refunds is R1.68 trillion, an increase of 7.9% compared to the 2022 amount of R1 563.8 billion. The 2023 gross amount of R2.068 trillion is 9.7% more than the R1.885 trillion collected in 2022, while the refunds paid is an increase of 18.7% compared to the amount of R321.1 billion paid out in 2022.

The net amount of R1.68 trillion must be seen against the 2021/22 outcome of R1.568 trillion, representing a year-on-year increase of R123 billion.

According to Edward Kieswetter, commissioner of Sars, the achievement of R1.687 trillion represents year-on-year a growth of 7.86% against a nominal GDP growth of around 5.8% or a tax buoyancy of 1.38.

In February 2023, the minister set an additional challenge of R94 billion and against that new estimate of R1.692 trillion Sars achieved 99.7%.

Kieswetter also referred to Minister of Finance Enoch Godongwana, who said in his 2023 Budget Speech that the country reaps the benefits of a more efficient and effective tax administration that is building trust to increase voluntary compliance and boost revenue collections.

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Growth in all tax types

Compared to the 2022 revenue outcome, there was growth in all tax types, with personal income tax (PIT) growing by 8.3% to R601.7 billion, company income tax (CIT) growing by 7.6% to R348.0 billion, Value-Added Tax (VAT) growing by 8.0% to R422.2 billion and customs and other taxes growing by 27.4% to R73.9 billion.

Targeted interventions across all segments of taxpayers ensured compliance revenue of R227 billion, which was also higher than the R215.4 billion of the previous year.

Kieswetter says these interventions include focused debt collection, a focus on criminal and illicit activities and declaration compliance among large businesses.

According to Kieswetter other gains this year include an increase in positive public sentiment which increased to 76.5% from 71.8% in the previous year, measured by a public opinion survey.

“Collected revenue provides 90% of government funding which shows how vital Sars’ role is in providing the resources that government uses for the reconstruction and recovery of the South African economy, as well as contributing to the long-term prosperity of our nation.”

The 2023 financial year end results are an important indicator of Sars’ commitment to implementing its legal mandate of collecting all revenue due, promoting a culture of compliance and facilitating legitimate trade.

Kieswetter says this mandate was summed up in an important principle that guides the work of Sars, called the Higher Purpose, which means that the revenue Sars collects enables government to build a democratic state that fosters sustainable economic growth and social development in the interest and wellbeing of all South Africans.

This means that government can pay old age grants, provide student financial aid, build clinics and schools and provide other basic services.

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Milestones show commitment of Sars staff

The ongoing milestones Sars reaches are an important indicator of the commitment by its staff to serve taxpayers and traders with professionalism, commitment, passion and integrity in accordance with the Higher Purpose, Kieswetter says.

“The journey of reimagining Sars has seen the establishment of a High Wealth Individual unit and the reinstatement of the Large Business and International segments.

“This step enabled Sars to provide an end-to-end segmented and customised service and compliance value proposition to individuals and large businesses.”

Kieswetter says the organisation is starting to see the positive results of this and collected R528.3 billion in these two segments.

“We are pleased with the improved level of compliance and will continue with the work. Importantly, is increased focus on all areas of non-compliance, including base erosion and profit shifting, as well as aggressive tax avoidance through complicated structuring of tax affairs by High Wealth Individuals and Multinational Entities.”

During the past tax year, Sars continued to refine its capability to detect and make it hard and costly for willful non-compliant taxpayers and it continues to administer a permanent Voluntary Disclosure Programme (VDP) for qualifying individuals, companies, or trusts that seek to voluntarily disclose and regularise their tax affairs.

In the 2022/2023 financial year, the VDP contributed R3.68 billion (0.2%) to the preliminary gross revenue outcome.

ALSO READ: Sars imposes heavier penalties on non-compliant SA taxpayers

Rolling blackouts affecting economy and revenue collection

Kieswetter also referred to the ever-present dark shadow of rolling blackouts, saying that it has a debilitating effect on the economy of the country and revenue collection.

“The constant electricity disruption is impacting the overall profitability and constrains normal lives and business growth. Equally important, load shedding is also providing opportunities for sub-sectors involved in renewable energy. We are also seeing an increase in renewable energy related imports, which benefits the fiscus.”

He says Sars will continue to explore all avenues of revenue collection and that the ever-evolving world of work is presenting new opportunities.

“This changed environment was never anticipated when we designed products to respond to the challenges in the economy. Naturally, the enabling legislative framework will be amended to keep pace with this new environment.

“We are, therefore, also refining our tools to cater for the gig economy and other areas of the digital economy, including looking at the role of media influencers.”