Sars collects more tax, but is missing targets

More than R100 billion in state revenue has been lost because of taxpayers who have failed to comply with their tax obligations, those who aggressively avoided taxation and those who openly defrauded Sars

2020-04-05 05:05:00 PM

More than R100 billion in state revenue has been lost because of taxpayers who have failed to comply with their tax obligations, those who aggressively avoided taxation and those who openly defrauded Sars

More than R100 billion in state revenue has been lost because of taxpayers who have failed to comply with their tax obligations, those who aggressively avoided taxation and those who openly defrauded the revenue collector.

He said this on Wednesday when he was announcing the provisional revenue collection figures.Net tax revenue was R1 356 billion, including refunds of R292 billion.The revenue figure was R68.2 billion (or 5.3%) more than in the 2018/19 financial year and came amid nominal GDP growth of just more than 4.8%, said Kieswetter.

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Through its revenue recoupment programme, Sars had collected an additional R75 billion for the state in the financial year ending in March.Nevertheless, the total revenue collected was still R66 billion (or 4.7%) less than the R1 422 billion target that was set in last year’s February budget and 0.2% less than the adjusted target of R1 359 billion budgeted in February this year.

All the figures are provisional and are subject to a financial reconciliation and a final audit.Kieswetter said revenue collections were weaker than expected in the past few years, largely as a result of poor economic growth.The latest financial year was no exception and less tax was collected in all tax categories, as had been estimated.

A sum of R582.9 billion in personal income tax was collected. This was an increase of 7.1% over the previous year, but was 4.7% lower than the forecast in last year’s budget.Personal income tax comprised 39% of the state’s tax revenue. In 2018/19, it made up 38.4%.

VAT – 25.6% of the total income – was 6.7% higher than in the previous financial year, but 3% lower than what was hoped for inFebruary last year.Read: 1.5m taxpayers have yet to file returnsCompany tax of R214.7 billion was collected. That was a small increase of 0.1% on the previous year and 15.8% of the total figure collected.

Revenue collected from companies in the agricultural sector decreased by 13.4%, by 13.9% in the petroleum industry and by 7.3% in the construction industry.Revenue collection from companies in the mining industry, accommodation and catering industry, and the medical and health industry was, respectively, 10.9%, 9.1% and 5% higher than a year ago, said Sars.

Mining companies’ earnings received a boost from stronger demand, driven by high demand in the iron ore and platinum group metals.Sars said unreliable electricity provision, stagnant commodity prices and the Covid-19 coronavirus pandemic had affected the profitability of companies.

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Kieswetter warned that, as an open economy, South Africa was very sensitive to problems in the world economy.That, combined with the Covid-19 crisis and Moody’s Investors Service’s decision to downgrade South Africa’s sovereign debt rating to “junk” status, could lead to a decrease in tax revenue collection, Kieswetter said.

Refunds worth R292 billion were paid out during the financial year.Just more than R232 billion was VAT repayments, R31.4 billion in personal income tax refunds, R19.3 billion to companies and R8.8 billion was diesel repayments.Kieswetter said that to help businesses with cash during the Covid-19 crisis, Sars made R2.4 billion worth of repayments in the first four days of the national lockdown – R1.1 billion to large businesses and R1.3 billion was to smaller businesses.

Sars said unreliable electricity provision, stagnant commodity prices and the Covid-19 coronavirus pandemic had affected the profitability of companies.Bernard Mofokeng, director and investment expert at the law firm CMS RM Partners, said Covid-19 could seriously hit South Africa’s VAT income and customs collection.

Treasury’s latest tax statistics showed that import VAT and customs made up 13.6% and 4.3% of total tax revenue in 2018/2019.“Import VAT makes a big contribution to VAT collection and if that declines, it will affect Sars’ VAT collection and, consequently, the state coffers.”

In 2018/2019, Asia was South Africa’s biggest supplier, with 36.1% of the total value of customs collection and about 45% of import VAT. Mofokeng warned that customs and VAT collection on imports could be even lower as the coronavirus spread in Europe. Europe is South Africa’s second-biggest import supplier, with 24.6% of the total value of customs and 35% of import VAT.

It was therefore clear it could make a dent in Sars’ revenue collection and lead to the country being compelled to borrow more money to finance projects. Read more: City Press »

Who in his/her right mind would enthusiastically pay taxes which disappear/leak like water in a container with holes like a sieve!! The AGs past & present have tried to close the leaks..dololo, the holes in the container were made deliberately, with powers that be's blessings!! And there has been and increase to above R60billion in state 'misappropriation of funds' over the last year & bailouts? let alone the loss of taxes with the ban of alcohol and cigs coming up..etc. Many thinking 'why pay taxes..just get looted'.The cost of a loss in trust...huge!

Stop complaining and cut the public sector wage bill in half. Most of those cronies are running shelf companies laundering money through our banking system in any case. They don't need the paycheck. Speculation. Now that they loose sin taxes on sigarettes and alcohol together with VAT and most probably must use their own bank accounts to carry on with luxurious lifestyles they blame public sector again. Well reap what you sow. More fraud.

Then the government officials should stop stealing the money. 🤷🏽‍♂️ corruption and looting is still at the order of the day. Politicians are filthy rich because of systemic corruption. Municipalities are dysfunctional and ratepayers do not receive services. Taxpayers want their money properly used to the benefit of the country.

Abramjee Is openly the same as successfully ? askingforafriend My friends: Abramjee Can we worry more about the R1200 billion that gets collected. Then funneled into ANC looters pockets, through municipalities and state owned enterprises. It's not that we are not collecting enough, it's just not being put to good use.

Abramjee People are tired of their hard earned monies being dished out to others Abramjee Go check how politicians are eating money ..I’m sure u can get some from there What about state looting? I think SARS , you can expect this problem to worsen with the recent bad news and maybe just maybe you should have investigated all those corrupt cadres when you had the chance

Abramjee What did Mr Kiesswetter expect, that people who are going to need every cent to survive over the next few months, would willingly just hand it over to the ANC government. Pull the other one, it’s got bells on Tom Moyane delivered Jamnandas deployee is feeding us excuses Tax collection revenue is down, and set to fall further due to the lockdown.. What plans does sarstax have to recoup the billions in lost revenue through tax defaulters, looters, sale of illicit goods eg cigarettes?

Abramjee More than R500 billion per year is wasted and stolen by cadre cronies. That's why. Not surprised at all 😐 Abramjee And how much more is sars losing with the idiotic smoking ban. Millions but hey everyone is Cele puppet. Don’t ask me for more taxes because you cant make Rama change the restrictions.

Kieswetter says I'm incompetent and can't manage fraudsters manipulate the system A fraction of what was lost through state capture. Abramjee Of taxpayers felt that their tax money were not wasted, compliance would have been better. Abramjee The guy failed, he must be fired I'm sure the non-compliance ratio remains similar year to year. Shortfall is due to high income skilled workers leaving and a stagnant economy all thanks to the MYANC .Oh and by the way SARS you owe me money which you are dragging your heels on. I'm going to charge penalties 🤬

Remember BOSASA n petrol stations. Tenders companies don't pay tax. Which makes sense...How can tax pay tax Is anybody being investigated? Is anybody being charged? Stop lying! I prefer tax money staying with the people that ought to pay it, not given to thieves in government. We were waiting to hear such things

It's a lot. But R100bn is a drop in the ocean compared to the combined cost of ANC cadre looting and the ANC's spectacular demolition job on the economy - without any help from a pandemic. Reality check. The Laffer curve or the beginning of a tax revolt! poor E started all fired up ready to go and now ...

Excuses excuses!🙄 PravinGordhan and TrevorManuel 's friend is a failure at SARS . Finish and klaar! Ask zuma and the Gupta's for the money, why must we fund their corruption Name them because they surely must face the law. So Mr Taxman EdKieswetter why are you not pursuing all those StateCapture crooks who fail to sue, as promised, PLMyburgh jacquespauw and the likes? That's big bucks, not the peanuts you get from squeezing little guys and pensioners.

You should have said that durring Tom, What happened to the Moyane Narrative? maggsnaidu If you know your taxes are being used to line someone's pockets rather than it being used to improve conditions in the country, one could be tempted to not pay tax and find loopholes to not pay. Should've just said, FRAUD or CORRUPTION nje

Who makes up these numbers And it’s only going to get worse Kieswetter is paid to collect we are not interested in his excuses. Go to Somalian and Pakistan spaza shops to collect Money and stop making noise. And those that have looted and stole our taxes? Pull the other one! And how much has the state misused tax payers money for their own personal obligations ? Let’s hear the other side of the story

Minus another couple of billions for the cigarette & alcohol ban. Save it! Sixty six billion rands is what you failed to collect! So, it's a two double edged sword, right? State sings, citizens dance? No need to explain... P9121525 81515445 423667898 0761324839 And because taxis drivers don’t pay tax.

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