TAX SURPRISE
SARS tax collection exceeds expectations for 2023/24
The South African Revenue Service collected more than anticipated in the fiscal year which ended at midnight on 31 March. It’s a signal that SARS, under Commissioner Edward Kieswetter, is getting its groove back after having been gutted during the Zuma era.
The SA Revenue Service (SARS) said on Tuesday that its preliminary estimates showed it had collected more than R1.74-trillion during the 2023/24 fiscal year, an increase of 3.2% over the previous year.
That is also R10-billion more than forecast in the Budget that Finance Minister Enoch Godongwana presented to Parliament in February. This in turn means that the Treasury’s projection of a budget deficit of 4.9% of gross domestic product (GDP) could be lowered slightly.
This performance came in the face of numerous headwinds, including economic growth which slowed last year to a paltry 0.6%.
SARS and the Treasury have also lost the lifeline thrown by mining companies a couple of years ago when record profits and prices translated into record taxes and royalties paid by the sector.
But corporate income tax managed to grow 3.8% despite a 66% fall in the taxes paid by the mining industry.
This signals that SARS, under Commissioner Edward Kieswetter, is getting its groove back after it was gutted during the State Capture era under former president Jacob Zuma.
Read more: How SARS used AI and proactive measures to claw back R210bn this tax year
In a presentation, SARS said that compliance had improved as it has pivoted to a focus on this issue.
SARS noted that it had modernised its systems to provide digital and streamlined online services, aiding its drive against non-compliance.
With economic growth expected to pick up this year to between 1% and 1.5% – which is still woeful but at least faster than last year – SARS should presumably collect more revenue this year, and perhaps the forecast debt-to-GDP ratios may also see some improvement.
Its revenue stream would really take off if the power, logistics and crime crises can be addressed and more people had jobs that fell into tax brackets. DM
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Well done on the collection part Mr Kieswetter. Hope springs eternal that your colleagues on the spending side of the balance sheet will do it wisely. No track record to speak of here sadly.
funny how the department responsible for money collection works so well, when the rest of the departments in the country are mostly dysunctional or non-functional.
SARS grabbed money out of people’s bank accounts within 5 days of issuing assessments which are wrong. It is unlawful to do so before objection periods and appeals are heard. This happened in March only and was obviously done to bolster their reported numbers and the money will then be given back when the documentation is handed in. SARS’ conduct is often both unethical and unlawful.