Sars gains from modernisation, revenue collection improvement

SA’s tax service vows to further strengthen its administration

A MODERNISATION programme, administration improvements and efficiency gains boost tax revenue by 25 percent, buoyed by personal income tax, VAT and company tax.

The SA Revenue Service (Sars) has vowed to further strengthen tax administration after preventing nearly R210 billion revenue leakage in the 2021/22 financial year.

Sars Commissioner Edward Kieswetter said on Friday the efficacy of the taxman’s administrative efforts had resulted in additional tax revenues being collected which prevented revenue leakages from impermissible transactions.

Kieswetter said that these efforts contributed R209.7bn for the fiscal year ended March 31, 2022, including R137.5bn of additional revenue and preventing impermissible refunds and leakages worth R72.2bn from leaving the National Revenue Fund.

“Our increased focus on revenue collection efforts is yielding pleasing results. This year I can report that just our compliance revenue efforts for the 2021/22 financial year yielded a revenue contribution of R209.7bn,” Kieswetter said. “We are making steady progress in our administrative efforts as several pockets of efficiencies emerge. It is too early to declare victory. We have a long way to go, and still drop the ball far too often.”

Kieswetter said attacks on the Sars refund system remained a huge concern and risk. The agency, however, continued to leverage the extended use of data, machine learning, artificial intelligence and technology enablement.

He said the use of data and technology, for a more intelligent and enabling environment, stepped up the momentum of Sars’ modernisation programme, subject to available resources.

“As a result, we have detected and finalised 1.87 million instances where a refund was either impermissible or we used it to offset a debt due by the taxpayer,” he said. “This has prevented an outflow of R70bn impermissible refunds outflow of around R61.36bn refunds and almost R8.62bn of outstanding debt.”

Sars announced a tax revenue of R1.563 trillion for the year ending March 31, 2022, representing a 25 percent increase or R314bn compared to the prior year.

This also resulted in a surplus of R16.7bn compared to the February budget upwardly revised full-year tax revenue estimate of R1.547trillon.

The 2021/22 tax collections were achieved despite uneven economic recovery across sectors from the impact of the Covid-19 pandemic.

This better-than-expected revenue outcome was largely driven by heightened commodities exports trade which boosted the profitability of those entities trading in precious metals, stones, ores, coal, and vehicles.

The main sources of revenue that collected were Personal Income Tax, which contributed R555.8bn, Value-Added Tax contributing R390.7bn, Company Income Tax at R323.6bn and Customs duties which contributed R58bn.

Sars paid out its highest-ever amount in tax refunds in 25 years of R321.1bn to taxpayers, representing an estimated 5.1 percent of gross domestic product, as gross tax revenue totalled R1.885 trillion.