Loading...
See More

Tax stats worry Sars

Oct 22 2012 14:49 Sapa
tax, sars


Related Articles

Tax revenue remains stagnant

Govt proposes to promote savings

Sars slaps Juju with R16m bill

Demand competent leaders, urges Ramphele

SA in for R5bn tax knock on pay freeze

New record for taxman

 
Cape Town - Tax revenue collection has not recovered much from the 2009 economic slump, SA Revenue Service (Sars) spokesperson Adrian Lackay said on Monday.

Lackay and a Sars team released the latest tax statistics in Parliament.

They showed that R742.6bn in revenue was collected in 2011/12, almost R4bn higher than Finance Minister Pravin Gordhan predicted in his February budget speech.

However, the tax-to-GDP ratio had remained stagnant compared to the figures in 2009, when business and profits in the country were constrained by the global economic crisis.

The country suffered a R60bn tax loss during the downturn.

"The tax-to-GDP ratio in 2008 bordered below 28%, went down to 24.5% the following year, and is now sitting at 24.6%," said Lackay.

This meant companies were still reeling from the after-effects of the constrained economic activity which followed the downturn.

"Corporate Income Tax (CIT) lags behind shifts in the economy."

The exact figures would only become known much later, as companies had a later financial year than Sars.

"Definitively, when GDP activity is lower, you see lower company profitability and that affects CIT significantly."

Lackay said companies were resilient in the first half of the year, but dynamics in the economy, including wildcat strikes in the mining sector, meant Sars was expecting lower profitability for companies.

"It will probably manifest itself during December, January and February next year," he said.

Lackay said the labour unrest could also become apparent in two ways - in monthly trade statistics, and through lower exports.

"Minerals are a big contributor to South African exports, specifically to Asia, the Eurozone, the [United Kingdom] and also the [United States], so we can expect lower outputs and low exports of minerals," Lackay said.

The real impact on company profitability will only be felt next year.

The number of companies listed on the CIT register showed negative growth of 2.1% by March 31.

This followed double digit positive growth in 2011.

Sars statistics showed that only a third of companies assessed during 2011/12 declared taxable income.

The rest declared either zero profits or losses.

Sars was much more upbeat about the growth in Personal Income Tax (PIT), with a steady increase in the number of people submitting returns from 1.7 million people registered in 1994, to 6 million people submitting income tax returns by 2012.

"There are 13.7 million working South Africans who pay PIT through employers... some don't have to submit returns because they fall below the threshold."

Currently, non-pensioners earning below R63 556 a year were not required to pay tax.

Lackay said Sars' modernisation unit had done good work since 2007, giving a clear picture of people working in the formal environment and which sectors employed them.

Similar changes had been made in customs and excise. Sars was now moving into a similar operation with regard to CIT.

"We'll have to do a similar operation with Value Added Tax: clean up the registers, check who really are registered as businesses and what economic activities they are involved in, and from there check who is on system and who is not supposed to be there," said Lackay.

Asked about the potential of huge scale fraud with company taxes, he said the risks were much smaller than with VAT.

"CIT, you can claim losses, but the magnitude, scale and potential for you to con the fiscus is stricter.... VAT is far riskier regarding fraud."

sars  |  tax
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
36 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 
 

Africa: Land of Billionaires!

Find out who are the richest of the richest in Africa!

 
 

Men24.com

Best bro movies 2014
Every man should be able to do these three things
Goalkeeper saves five penalties with his FACE!
Hottie of the day: Jesselyn

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...