The South African Revenue Service (SARS) has undershot Treasury’s revised revenue target for 2017-18.
SARS collected R1.216-trillion for 2017-18‚ Finance Minister Nhlanhla Nene said at the announcement of the preliminary revenue results in Pretoria on Tuesday. Tax revenues amounted to R700m‚ or 0.06%‚ short of the revised estimate announced in the February 2018 budget‚ but still represents growth of R72.4bn or 6.3% from 2016-17.
Malusi Gigaba‚ who was finance minister at the time‚ announced in the budget in February that tax collection of R1.217-trillion was expected — up slightly from the previous estimate of R1.214-trillion but still much lower than the ambitious R1.265-trillion target announced in 2017.
Treasury still expects a R48.2bn revenue shortfall for 2017-18‚ which it says reflects weak growth‚ administrative challenges at SARS‚ and increased tax avoidance.
Under the watch of suspended commissioner Tom Moyane‚ SARS has in recent years reported revenue shortfalls on a scale not seen since the 2008 financial crisis.
SARS collected a gross amount of R1.415-trillion in 2017-18‚ which was offset by refunds of R234.3bn.
Personal income tax contributed R462bn‚ value-added tax (VAT) contributed R297bn‚ company income tax contributed R220bn and customs contributed R49bn.
An improved trend in revenue collection in the latter part of 2017 was offset by a contraction in March‚ because of timing issues and base effects relating to bringing collections forward.
“Up until February we were right on track but the collections in March broke this‚” said SARS head of research Randall Carolissen.
Nene said: “Tax compliance is one of the key determinants of revenue collection. SARS has seen a decline in compliance.
“Ninety% of the budget comes from revenue collections and forms the basis of our fiscal framework‚” he said.
The 2018 budget demonstrated that growth was expected to be higher and that the government had made significant changes to the fiscal framework‚ including revising the expenditure ceiling downwards‚ Nene said.
The revenue estimated for 2018-19 is R1.345-trillion‚ which represents growth of 10.3%.
by Sunita Menon-BusinessLIVE