While South Africa’s economy continues to face challenges of load shedding and impaired port and logistics operations, the South African Revenue Service (SARS) has collected a gross tax revenue of R2.155 trillion for the 2023/24 financial year.
SARS commissioner Edward Kieswetter said this amount was in line with the revised estimate representing a year-on-year growth of 4.2% against a nominal gross domestic product (GDP) of 4.9%.
Net revenue, which is the revenue after refunds have been paid to taxpayers amounts to R1.741 trillion, which exceeds the revised estimate set by the Minister of Finance by some R10 billion, representing a year-on-year growth of 3.2% (or R54.2billion) more than last year.
“This revenue performance translates to a tax-to-GDP ratio of 24.7% and a provisional tax buoyance ratio of 0.9% at gross level and 0.7% at net revenues,” Kieswetter said.
The revenue service refunded taxpayers with an amount of R414 billion, representing a year-on-year growth of 6%, which is the highest quantum of refunds paid out in the history of SARS. It increased by R33 billion from the prior year.
Revenue by tax products
Compared to the 2022/23 fiscal year, total tax revenue increased by R54.2 billion (3.2%), driven by personal income taxes of R49.5 billion (8.2% year on year or y/y) on the back of higher than estimated compensation of employees, as well as higher domestic VAT of R39.3 billion (8.1% y/y).
Net Personal Income Tax, which accounts for 37.3% of total revenue, grew by R49.5 billion 8.2% in 2023/24, as employment improved year-on-year from and average wage settlement rates improved from an annual average of 6.0% in 2022 to 6.3% in 2023.
PAYE collections from incentives and bonus payments predominantly from the finance sector also boosted PIT revenue.
Net Corporate Income Tax (CIT) contracted by R31 billion (-8.9%) in 2023/24, while the mining sector saw a decline R42 billion, which is lower than the PY by 49.0%.
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.
“The real area of contraction that we are concerned about is CIT. While we have seen good growth in sectors like the finance sector and the electricity sector, we have seen contraction in the mining sector, year-on-year and in the manufacturing sector.
In fact, mining sector is significant as a result of a slowdown in commodity prices, load shedding and challenges at the ports and rail and generally, the logistics sector. And unless that enabling infrastructure is fixed, we are going to continue to constrain growth in the manufacturing and the mining sector,” said the commissioner.
The Net Value-added Tax (VAT) growth of R25.4 billion (6.0%) is largely attributable to Domestic VAT (up by R39 billion (8.1%), import VAT (higher by R10 billion (3.9%) and higher outflow of VAT Refunds R23.9 billion (7.5%).
“SARS is determined to make it hard and costly for taxpayers who wilfully fail to meet their obligations. The SARS compliance programme contributed R293.7 billion as at end of March (preliminary). This is an increase of R61.9 billion (26.7%) from the previous year’s R231.8 billion,” the commissioner said.
Since its inception, SARS has collected R21.6 trillion in net tax revenues.
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