SARS pays out record amount in tax refunds
The South African Revenue Service (SARS) has paid out its highest-ever amount in tax refunds in 25 years, representing an estimated 5.1% of gross domestic product, Commissioner Edward Kieswetter said.
SARS announced its preliminary revenue collection outcome for 2021/22. The tax agency saw a 25% year-on-year growth in revenue collection overall to R1.564 trillion for 2021/22, beating the budget estimate of R1.547 trillion according to the provisional tally.
This would be the second consecutive year that tax collection has exceeded the budget estimate.
Kieswetter said the refunds reflected a growth year-on-year of 10% mostly dominated by VAT (R262.4 billion), Personal Income Tax (R33.7 billion) and CIT (R17.7 billion). Customs duties brought in around R58 billion.
"In the processing of tax refunds, we strive to balance the trade-off between taxpayer service and risk management as we are acutely aware of the risks to the fiscus," he said.
The rebound in tax collections in 2021/22 was despite uneven economic recovery across sectors, Kieswetter said, with the tax-to-GDP ratio recovering to a high of 24.7%, viewed against the long-term average of 22%.
"The recovery of the various sectors of the economy [was] not only uneven but also varied from quarter to quarter. We found that mining and manufacturing recorded strong real recoveries in 2021, at 11.8% and 6.6% respectively," said Kieswetter.
"A tax revenue sector analysis indicates the annual growth across all sectors but led by mining, manufacturing and the wholesale and retail sectors."
However, the construction sector contracted by almost 2%.
Kieswetter said that in 2021, private consumption remained the same in real terms, below pre-pandemic levels, while government investment contracted. Looking forward, he said real household consumption is expected to grow to 5.7% in 2021 from -6.5% in 2020 - and this is driven by consumers and companies' consumption of non-durable goods. SARS’ target for the 2022/23 year is R1.599 trillion. -Fin24/Bloomberg
SARS announced its preliminary revenue collection outcome for 2021/22. The tax agency saw a 25% year-on-year growth in revenue collection overall to R1.564 trillion for 2021/22, beating the budget estimate of R1.547 trillion according to the provisional tally.
This would be the second consecutive year that tax collection has exceeded the budget estimate.
Kieswetter said the refunds reflected a growth year-on-year of 10% mostly dominated by VAT (R262.4 billion), Personal Income Tax (R33.7 billion) and CIT (R17.7 billion). Customs duties brought in around R58 billion.
"In the processing of tax refunds, we strive to balance the trade-off between taxpayer service and risk management as we are acutely aware of the risks to the fiscus," he said.
The rebound in tax collections in 2021/22 was despite uneven economic recovery across sectors, Kieswetter said, with the tax-to-GDP ratio recovering to a high of 24.7%, viewed against the long-term average of 22%.
"The recovery of the various sectors of the economy [was] not only uneven but also varied from quarter to quarter. We found that mining and manufacturing recorded strong real recoveries in 2021, at 11.8% and 6.6% respectively," said Kieswetter.
"A tax revenue sector analysis indicates the annual growth across all sectors but led by mining, manufacturing and the wholesale and retail sectors."
However, the construction sector contracted by almost 2%.
Kieswetter said that in 2021, private consumption remained the same in real terms, below pre-pandemic levels, while government investment contracted. Looking forward, he said real household consumption is expected to grow to 5.7% in 2021 from -6.5% in 2020 - and this is driven by consumers and companies' consumption of non-durable goods. SARS’ target for the 2022/23 year is R1.599 trillion. -Fin24/Bloomberg
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