South African Revenue Service reports positive revenue results
The South African Revenue Service (SARS) reported that it had collected a record gross amount of ZAR2.155 trillion for the 2023/24 fiscal year, a year on-year increase of 4.2% against the nominal GDP of 4.9%.
Compared to the 2022/23 fiscal year, total tax revenue increased by ZAR54.2 billion (3.2%), driven by personal income taxes of ZAR49.5 billion (8.2%) on the back of higher than estimated compensation of employees, as well as higher domestic VAT of ZAR39.3 billion (8.1%).
Net Personal Income Tax (PIT), which accounted for 37.3% of total revenue, grew by ZAR49.5 billion or 8.2% in 2023/24, as employment improved year-on-year and average wage settlement rates improved from an annual average of 6% in 2022 to 6.3% in 2023. PAYE collections from incentives and bonus payments predominantly from the finance sector, also boosted PIT revenue.
However, net Corporate Income Tax (CIT) contracted by ZAR31 billion (8.9%) in 2023/24, while the mining sector saw a 49% decline of ZAR42 billion. 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% of total revenue.
SARS paid out refunds of ZAR414 billion to taxpayers, bringing the net collected amount to ZAR1.741 trillion which was almost ZAR10 billion higher than the revised estimate and ZAR54 billion more than last year’s ZAR1.687 trillion.
Total refunds represented about 6% of GDP, said SARS, and ZAR120 billion and ZAR37 billion of the refund benefit were directed to SMME’s and individuals respectively which, it said, was good when business and individuals remain cash strapped.
However, SARS Commissioner Edward Kieswetter said: “Whilst we are pleased that the ZAR414 billion returned into the hands of taxpayers is good for the economy, I remain concerned about the refund fraud and abuse.”
SARS said the corporate tax register had grown by 411,000 companies, of which 1,500 contributed ZAR214 million in gross revenues in the year under review, and by 1.1 million individuals. Almost 40,000 new employers had voluntary registered for PAYE, of which 19,000 contributed ZAR2.7 billion additional tax, totalling ZAR3.4 billion in the year under review.
Kieswetter said: “The ZAR21.6 trillion tax collections represents a compound growth of 9.9% per year since the inception of SARS in 1997. This has funded the South African democracy and touched the lives of millions who would be destitute without government support and services. We, who have the privilege to work at SARS are justly proud of these achievements because these efforts contribute directly to nation-building and sustain our democracy.”
In February, President Cyril Ramaphosa announced that Kieswetter had agreed to extend his term as SARS commissioner for two more years. Kieswetter was appointed in March 2019, and took office for his five-year term in May of that year.
