E10bn in tax revenue
The manufacturing, wholesale and Retail sectors realised a noticeable increase in revenue contribution while the agricultural sector recorded a decline.
The revenue collection was divided into direct taxes and indirect taxes. Direct tax encompasses fuel tax, road toll, sin tax, import motor vehicle levy and value added tax (vat). Indirect tax includes company tax, graded tax, individuals and other income tax.
highest
Individual tax contributed E3.796 billion and was the highest contributor to the collections.
Individual tax (or personal income tax) is a tax levied on the wages, salaries, dividends, interest and other income a person earns throughout the year. Graded tax and company taxes contributed E0.012 million and E1.837 billion respectively while other income tax gave E0.533 billion.
VAT, which is charged on goods and services, levied at each stage of a supply chain was also a major contributor in the collection with E3.134 billion. Fuel taxes amounted to E1.289 billion while road toll and import motor vehicle Levy gave E0.057 billion and E0.012 billion, respectively.
Alcohol and tobacco contributed E0.029 billion into the collection.
ERS Commissioner General Brightwell Nkambule, in a statement, said the performance of the entity was marred by the slow economic growth, which was impacted by the COVID-19 pandemic and the political unrest.
“Although the last few years have been difficult for the ERS, I would like to send my utmost appreciation to the entire ERS family, our employees, who have remained committed to exerting effort towards attaining the revenue target despite the uncertainties in our operating environment brought about by the economic challenges and the pandemic,” said Nkambule.
He stated that despite the sluggish economic conditions and adverse impacts of the pandemic, the 2021/22 financial year was marked by the commencement of the implementation of a new ERS Strategic Plan for the year 2021/22 to 2023/24.
Nkambule said their vision was to attain a 100 per cent voluntary compliance for a better country. “ERS continues to hold in high regard, our regional and international partners, who remain an integral part of our business model. For this reporting period, we would like to appreciate the World Customs Organisation (WCO) for extending support through technical assistance in customs initiatives,” he added.
targets
The report reflects the performance of ERS against its strategy and annual targets. It is compiled in line with legislative and governance framework for the entity. The report demonstrates the organisation’s value creation and focuses on improving it in the short, medium and long term.
Chairman of the Board at ERS, David Dlamini, said even though there were challenges, the organisation worked closely towards the targets. He said the Board appreciated the resilience of the staff to the mandate given to them.
“Following a lot of introspection and feedback from stakeholders, focus was placed on changing the organisation from ‘authority’ to a ‘service’ and making it more focused on customers,” he said.
Minister of Finance Neal Rijkenberg announced budget estimates of over E26 billion for the 2023/24 financial year. “SACU receipts will contribute E10.25 billion from E5.8 billion in the previous year. Non-SACU revenue is budgeted at E13.75 billion from E12.8 billion, a growth of seven per cent.
“Total income taxes are projected to be E6.98 billion in 2023/24, a slight increase from the previous year’s budget. This is because of higher expected growth and employment in 2023/24 compared to 2022/23. Out of this, corporate income taxes are E1.8 billion and personal income taxes are E4.5 billion,” said the minister.
Rijkenberg also stated that the total taxes on goods and services were expected to be E6.13 billion in the year. He said this was mainly VAT, which was budgeted at E4.5 billion and fuel taxes amounting to E1.36 billion.
Economist Thembinkosi Dube, speaking before the minister’s budget speech said taxes were very important to influence a country’s budget. “All the different kinds of taxes are very important to the influence of the budget and they are one of the ways any government in the world makes money to boost the national coffers,” said Dube.
He said the country needed to open other avenues of making income in order to reduce the tax burden.