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SARS collects R814bn in taxes

South African Revenue Service

Pretoria – In what Finance Minister Pravin Gordhan today described as a “remarkable achievement”, the South African Revenue Service (SARS) exceeded its target when it collected more than R814 billion in taxes for the 2012/13 fiscal year.

The figure is R4 billion (0.5 percent) more than what Gordhan projected when he delivered the National Budget in February.

Gorhan disclosed the revenue service’s preliminary tax collection results on Tuesday as government marked the beginning of the new financial year.

It’s also the first set of results after the introduction of SARS’s new five-year Compliance Programme in 2012.  The programme was introduced 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 percent 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.

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.

“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.

But the preliminary revenue outcome today, said Gordhan, was in line with the economic performance of the country and reinforced expectations for continued improvements in tax revenue as the economy continued to recover over the medium term.

“In addition, while under-spending by government departments and agencies is a concern for service delivery, there are no indications that any department or agency has significantly overspent, illustrating the will and administrative strength to ensure that the integrity of the fiscus is not undermined by the departments spending more than they are allocated.”

Gordhan also 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”.

“They should know that they don’t have a place in our society and will be treated as outcasts.”

Meanwhile, SARS Commissioner Oupa Magashula cited tough economic conditions to be still 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

But the positive thing was that the SARS Debt book came down by R6 billion this past financial year, an indication that more tax payers were complying with their obligations.

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

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