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SARS has collected R1.356 trillion in tax revenue so far for the 2019/20 fiscal year up 5.3% from the previous year.
The 2019 national budget estimate was for revenue collections to be as much as R1.422 trillion.
The revenue agency's financial year runs from 1 March to 28 February of the following year.
Commissioner Edward Kieswetter made the announcement on Wednesday. He was speaking at a media briefing on the preliminary results announcement for the 2019/20 fiscal year.
"At the start of the year we knew the challenges we would face would be steep due to the sluggish economy and the state of SARS. We did not imagine we would close the year with the impact of the coronavirus and an investment downgrade.
"Notwithstanding, we believe that the revenue result of a year-on-year growth is a credible performance given the current economic environment," said Kieswetter.
The increase came despite SA recession in the last quarter of 2019.
Here are the key points
- Personal income taxes amounted to R528.9 billion, a growth of 7.1% from the prior year. These taxes account for 39% of SA's revenue collection.
- Corporate income tax collections grew by 0.1% to R214.7 billion, accounting for 15.8% of total revenue. This tax's contribution to total revenue has been declining over the years due to weaker economic growth and low business profits.
- VAT grew 6.7% to R346.2 billion. It is the second-largest contributor to revenue, at 25.6%.
- Excise duties grew 9.3% to R127 billion, representing 9.4% of all revenue.
- Customs grew by 0.8% to R55.4 billion, accounting for 4.1% of all revenue.
- Property taxes grew by 4.8% to R16 billion, and accounted for 1.2% of tax revenue collections.
- Other taxes grew by 1.2% to R39 billion, making up 2.9% of all revenue.
- SARS managed to pay out total refunds amounting to R292 billion to taxpayers.
Speaking on the impact of the Covid-19 pandemic and the downgrade of SA's credit rating to non-investment grade by Moody's on Friday, Kieswetter said that it would be up to Finance Minister Tito Mboweni to adjust revenue collection estimates for the coming year.
"Where the current phenomena of Covid-19 will lead us to, we have to be agile, we have to be responsive. We will collaborate and work with our Treasury colleagues with the guidance of the minister. For now the revenue targets stand and we work to that," said Kieswetter.
Earlier this week Mboweni announced a number of exceptional tax measures, as part of a fiscal package to support the country's response to the Covid-19 outbreak. These measures are effective from Wednesday, 1 April 2020.
They include:
- A tax subsidy to employers of up to R500 per month for the next four months; it applies to private sector employees earning below 6 500 under the Employment Tax Incentive.
- SARS will also increase the frequency of payment of employment tax incentives reimbursements, from twice a year to monthly.
- Tax compliant businesses with a turnover of R50 million or less will be allowed to delay 20% of their employees' tax liabilities over the next four months. They will also be able to delay a portion of their provisional corporate income tax payments, without penalties or interest, over the next six months.
So far no further exceptional measures have been determined, including the extension of deadlines for submissions said Kieswetter.
"At this stage there is no decision to move deadlines. We will be empathetic to the developments," he said. Kieswetter noted that some taxpayers wanted to "make virtue out of misfortune" by not making provisional payments to SARS as they are due and blaming it on Covid-19.
"We would like to appeal to taxpayers, as far as possible we pay our taxes, we maintain our compliance levels. If we let this slip, we will go down a slippery slope which will take years to correct," said Kieswetter.
Impact of downgrade
Kieswetter said the president had called a special Cabinet committee meeting on Wednesday to work together on assessing the impact of Covid-19 and the Moody's downgrade. "These two things, although separate factors have an intertwined impact on the SA economy," said Kieswetter.
Kieswetter said the rating agency's downgrade could not have come at a worse time. "That plus Covid-19 will have a profound impact of economic activities," he said. This will have implications for revenue collections.
