SARS fails to achieve tax targets
Revenue 0.06% short of budget estimates but still represents growth
THE SA Revenue Service (SARS) has undershot the 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 yesterday.
Tax revenues amounted to R700-million‚ or 0.06%‚ short of the revised estimate announced in the February budget‚ but this still represents growth of R72.4-billion, or 6.3%, from 2016 to 2017.
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 last year.
The Treasury still expects a R48.2-billion 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 R234.3-billion.
Personal income tax contributed R462-billion‚ valueadded-tax (VAT) contributed R297-billion‚ company income tax contributed R220-billion and customs contributed R49-billion.
An improved trend in revenue collection in the latter part of last year was offset by a contraction last month‚ 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‚” SARS head of research Randall Carolissen said.
Nene said: “Tax compliance is one of the key determinants of revenue collection.
“SARS has seen a decline in compliance.
“Ninety percent 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%.
Compliance, a key determinant of revenue collection, has declined