Tax stats worry Sars

2012-10-22 14:49

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."

  • frank.vankaapstad - 2012-10-22 15:06

    SARS is one institution that is actually progressing, although there is room for plenty of improvement. They can do us all a favour by creating a rock solid case against Juju and sending him to jail for tax evasion, the lying corrupt little cheat.

      gerald.king.589 - 2012-10-22 15:58

      Unfortunately for me and others i think the juju one will play out as... Zuma's made himself enemies so he wont win Polokwane. The next leader is surely on Juju's side already. Juju will have some big role in the anc. Like with zuma, criminal charges will evaporate redeeinng the wildest heights of his polotikal career. Do you really think he'll set foot in jail?! Thats what im mentally set for to avoid disapointment...

      rejeanne.nel.33 - 2012-10-22 16:48

      All the goverment's money are going to tederpreneurs (Juju is but 1 of millions), and all tenderpreneurs are by default crooks (Like Juju). Do you think a crook is going to be honest about his TAX return?(Like Juju) Just remember people, Juju has been stealing our money for years, and Zuma knew about it all, the whole time. They are only going after Juju now that he is no longer a "friend" of Zuma. How many "friends" of Zuma are out there do you think?

      claudia.meads - 2012-10-22 17:32

      " institution that is actually progressing...". Surely you are not talking about S.A.R.S. aka the Stealing Afrikaner Revenue Sangomas - all they have managed was to substantiate the African stereotype - viz 'theft' is the only bona fide competence on the dark continent. The fundamental reason that businesses in SA is not profitable (ie generate more tax income for the state - the Tax/GDP ration = stagnant) is due to the fascist regime's Marxist Zimbabwefication of the South African economy. It is due to the labor laws, due to the unions, due to Affirmative Action - BBBEE and its quotas, etc, etc.

      frank.vankaapstad - 2012-10-22 19:58

      @claudia - SARS is progressing because they are becoming more effective at collecting tax revenue and catching tax avoiders. Don't confuse SARS with "our" Government, they merely manage the collection of tax on behalf of the government. Your gripe is with the ANC's racist policies, and I agree that it is these policies that are destroying this country.

      amanda.victor.92 - 2012-10-23 01:07

      @Frank - why is SARS the ONLY government department which seems to work? It's all the ANC cares about, collecting money. The rest of the country can go to hell in a hand basket.

      hendrik.verwoerd.94 - 2012-10-23 03:35

      What about Wiese and other rich people??

      derekneilmaclachlan - 2012-10-23 10:06

      Not only him!!!!There are thousands of Chinese nationals in SA running huge business and not paying VAT or Tax....They seem to be a protected species in SA!!!!!!!!!!!!!!!!

      koos.meyer.52 - 2012-10-23 16:17

      What about the Minibus taxi industry that pay zero taxes, yet taxi bosses make millions every year? SARS is scared of this industry, message being that if you behave like a violent thug you don't need to pay any taxes, lovely stuff...

  • Ze Don - 2012-10-22 15:09

    As our disposable income diminishes day by day our spending, by necessity, will decrease. Resulting in lower turnover in the retail sector. In turn SARS will get less revenue from VAT and will increase income tax... so the cycle goes.

      lacrimose.wolf - 2012-10-22 19:28

      ...and as fewer and fewer are added to the formal income tax sector due to joblessness and unemploy-ability. The current pool of taxpayers will eventually die, retire or emigrate (not necessarily in that order :)) So where are the replacements? Currently on govt grants. They've created their own perfect storm

  • judith.taylor.56 - 2012-10-22 15:15

    Perhaps SARS should have a word with Dept of Labour about the labour laws and DTI about barriers to business entry

      george.slade.161 - 2012-10-22 15:47

      RAther have a word with the UNIONS : Who in their right mind would employ labour ?? Panga,s and all.

      SarelJBotha - 2012-10-23 10:55

      Actual use of taxes should be done by the actual communities who pay the taxes and not by some party idiots who first make sure they get there cut of the top.

  • jocelia.petrick - 2012-10-22 15:29

    Are they worried because the members of parlement will not have enough money to steal?

  • joahan.smal - 2012-10-22 15:30

    Strict currency controls have resulted in many companies keeping international accounts. It is cheaper and easier to transfer money from one offshore account to another as I have experienced recently when First National Bank charged me an effective 6.09% for paying an account in Botswana. So SARS and the banks are to blame to a very big extent.

      george.slade.161 - 2012-10-22 15:49

      Whitey : Methinks you are a bit lost ! What on earth has Keeping Foreign a/c,s got to do with reduced Tax revenue ??

  • john.dough.5836711 - 2012-10-22 15:33

    Stop stealing and it will increase!

      SarelJBotha - 2012-10-23 10:56

      Effectively he is saying that the taxes is not enough for normal use and the criminals in government positions.

  • faan.gerber - 2012-10-22 15:35

    This is a department that keeps on impressing me - their service in general is of a high standard ( I still don't like them ).

      lynette.venter.12 - 2012-10-22 15:51

      Of course this is one department that will shine - it's the one that takes all our money and gives it to the corrupt government!!

      hilda.macarthur - 2012-10-22 17:40

      I have to agree with you. Taxes are something we all hate, and I think they should make it as easy as possible to file your returns and get customer service. After dealing with the IRS in the US for more than a decade, SARS was just about the only breath of fresh I've experienced in SA. With state and federal tax over there t8 returns took me a good part of a day to complete, here it takes me less than 10 minutes, most of it trying to find my log in information. Also did my parents' while we were sitting chatting.

      abraham.mbambo.14 - 2012-10-24 15:53

      @ Lynette. Then why dont you stop going to work so as to stop funding this corrupt government. AS put across SARS just collects money. Do not shoot the messenger.

  • andrez.kolesky - 2012-10-22 15:38

    Our Prez is going to have a Cadenza if this sinks in ....

      mc.segal.5 - 2012-10-22 16:06

      Dont Worry It Wont.

  • JAbu.R15 - 2012-10-22 15:52

    If other government entities were this good in collections then we wouldn't be having all the protests we are having because everybody would be paying for services they use. now it's only SARS that collects money, Eskom failed long time ago so did the municipalities.

      mc.segal.5 - 2012-10-22 16:12

      Now get some school books to the people so they can study,get clever and earn money. Then they can pay tax see. Also tax the Taxis, Malemas and other sponges. Also if we were spending our taxes in the right places. Schools Lights and water etc we can grow some taxpayers not welfare bums.Very few people Want to be on welfare..?? Nkandla gate is a joke.Not a funny one either.

  • larry.piggott1 - 2012-10-22 16:12

    It will be a big worry for SARS next year,

  • braamc - 2012-10-22 19:11

    Your wasteful tax spending and theft are out of control. Clean up the filthy thieving corrupt ANC.

  • be.els.33 - 2012-10-22 20:12

    How much tax will Jacob Zuma have to pay on the quarter of a billion rands windfall he is receiving from the Treasury to upgrade is private home? Here's hoping its 100%!

  • beryl.knipe - 2012-10-23 02:21

    Then of course, you get all the Chinese markets/companies which don't pay VAT or company tax? Who's checking this - I wonder?

  • john.knipe.10 - 2012-10-23 08:39

    What people forget is that we actually pay the government about 60 cents in every rand we spend in some or other form of tax and duties. So the money will keep on coming in to the gov coffers to feed their greed.

  • darryl.rebello.90 - 2012-10-23 10:08

    the reason that most countries that are third world remain third world and/or slide towards fourth world is due to an eroding tax base. This is especially true of de-colonised Africa where the propensity for excessive government corruption reduces it even further together with elitist / corrupt beneficiaries spending on consumption goods. This is why infrastructure begins to crumble and eventually can no longer be maintained. The effect here is to contract the economy / tax base even more in future years...and the vicious cycle eventually devolves into the usual coups d'etat so beloved of the former colonial world...the way back is very painful!

  • SarelJBotha - 2012-10-23 10:53

    The country cannot suffer a tax loss as such. Taxes are not a given resource and the regime should remember that. The taxpayer however do suffer huge tax losses due to mismanagement of taxes, corruption and downright theft.

  • juanroux.greyling - 2013-02-25 14:05

    "You cannot multiply wealth by dividing it". Stealing from the rich to give to the poor..........If only it had worked that way. Our country steals from the rich to make themselves rich and the poor even poorer. SARS is just the middleman!?

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