Taxman in race against time to deliver on tax revenue estimate

The South African Revenue Service (SARS) would be working hard over the next three days to collect the about R80bn it needs to meet its tax revenue estimate of R1.14-trillion for 2016-17, SARS group executive Randall Carolissen said Tuesday.

“It is going to be hard going but we believe we are going to make it,” Carolissen told a briefing of Parliament’s standing committee on finance.

Import taxes were beginning to pick up and March was the main month for large companies to pay tax, he said.

He accompanied SARS commissioner Tom Moyane and group executive Marius Papenfus to brief MPs on its performance for the three months to December.

Carolissen told MPs that corporate tax collection was beginning to pick up after what was a “very worrying” slump in February when it only grew 2% year on year compared with the expected 8% which had prevailed in August. SARS was analysing the reasons why taxpayers had failed to pay and it was too early to suggest that there was a “tax revolt” as MPs suggested.

Carolissen said SARS had managed to maintain a ratio of tax to GDP of 26% despite low economic growth and amid “very difficult circumstances”.

He noted that tax revenue growth until December of 7.7% was well on target and would have allowed SARS to achieve the revenue estimate of R1.152-trillion as set out in the medium term budget policy statement.

However, in February the growth rate “collapsed” to 1.7%, bringing the growth rate for the year to date to 6%.

February was damaging because personal income tax only grew 2% and it also reflected the 20% decline in imports experienced in December.

Carolissen said it was “hugely unfortunate” and “totally

incorrect” that the R30bn shortfall in tax revenue in 2016-17

relative to the R1.175-trillion estimate in the February 2016 budget was attributed to SARS’s lack of efficiency.

SARS attributed the lower collections on import VAT and customs duties “to the subdued growth levels of merchandise imports resulting from rising import costs and weak domestic activity dampening the demand for consumption and capital goods”. SARS will announce the collection outcome next week.