Tax collection shows resilience despite economic climate

The South African Revenue Service (SARS) collected a record gross total of R2.155-trillion for the 2023/24 fiscal year – a R54-billion increase in revenue collection.

According to SARS commissioner Edward Kieswetter, the tax utility paid out refunds of R414-billion to taxpayers – the highest ever quantum in refunds, compared with R381bn the previous year, representing growth of 8.6%.

This brings the collected net amount to R1.741-trillion, which is almost R10bn higher than the revised estimate and R54bn more than last year’s R1.687-trillion.

Kieswetter added that VAT refunds of R343bn represent a growth of 7.5% over the prior year.

Total refunds this year represent about 6% of GDP.

Kieswetter said it was pleasing that R120bn and R37bn of the refund benefit were directed to SMMEs and individuals respectively. He said this was good when business and individuals remain cash strapped.

“While we are pleased that the R414bn returned into the hands of taxpayers is good for the economy, I remain concerned about the refund fraud and abuse,” said Kieswetter.

In the period under review, SARS was able to prevent the outflow of R101bn in impermissible refunds.

Compared with the previous fiscal year, total tax revenue increased by R54.2bn (3.2%), driven by personal income taxes of R49.5bn, 8.2% on the back of higher than estimated compensation of employees, as well as higher domestic VAT of R39.3bn.

Corporate Income Tax (CIT) contracted by R31bn (-8.9%) in the current fiscal year, while the mining sector saw a decline of R42bn.

The CIT contribution of large businesses contracted by 17.5%, while the contribution from small businesses increased by 8.8%. CIT collections accounted for 18.0% of total revenue.

Net VAT growth of R25.4bn (6.0%) is largely attributable to Domestic VAT (up by R39bn or 8.1%), import VAT (higher by R10.0bn or 3.9% and higher outflow of VAT Refunds – R23.9bn (7.5%).

“The R21.6-trillion in tax collections represents a compound growth of 9.9% per year since the inception of SARS in 1997,” said Kieswetter.

He added that the revenue achievements of the last 30 years would not have been possible if it were not for the effective and beneficial partnerships established by working with compliant stakeholders in the tax and customs ecosystems that deliver maximum benefits for taxpayers, traders, government and citizens.

“Ultimately, we are augmenting the work of our employees, with the investment in data science, technology and artificial intelligence, towards the goal of making the fulfilment of tax obligation a seamless process,” said Kieswetter.

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