Picture: Ziphozonke Lushaba, Independent Media
JOHANNESBURG - South African Revenue Services (Sars) and the National Treasury said that the total revenue collected for the fiscal years, from 2007/08 to 2016/17 amounted to R8.13 trillion.  

Sars also said tax revenue collected all but doubled in 10 years, increasing from R572.8 billion in 2007/08 to R1.1trn in 2016/17.

The two organisations, in a joint statement, said the adjustment of income brackets and the minimum tax threshold for fiscal drag has resulted in reducing marginal tax rates for low and middle-income taxpayers. 

“Measures to include the taxation of capital gains and taxing individuals on a residence basis on worldwide income have served to broaden the tax base, thus ensuring that the tax burden is spread more equitable.”

South Africa has faced escalating problems of deteriorating revenue collection and further downward revisions to economic growth projections that have significantly eroded government's fiscal position. 

Tax revenue, as described in the Medium Term Budget Policy Statement, is projected to fall short of the 2017 Budget estimate by ZAR 50.8 billion, the largest under-collection since the 2009 recession.

Chetan Vanmali, a senior associate at Webber Wentzel, said it was fortunate that South Africa has a relatively low VAT policy gap owing to the relatively straight-forward and simple VAT policy structure in place. 

“To ensure that this position is maintained, it is imperative that South Africa's e-commerce legislation keep pace with recent developments and takes head of the recommendations in the Davis Tax Committee VAT Report,” Vanmali said.

Interestingly, the revenue services said 42% of assessed taxpayers were registered in Gauteng, while 26.9% of assessed taxpayers were aged 35 to 44 years; and 55.1 percent of assessed taxpayers were male taxpayers while 44.9 percent were female.

Sars said revenue from personal income tax (PIT), as a percentage of total tax revenue, increased from 29.6 percent in 2007/08 to 37.2 percent in 2016/17 – a share of 8.4 percent of GDP over this period.  Net value-added tax (VAT) collections were the second largest contributor to total tax revenue in the past 10 years. The revenue service said on average, net VAT accounted for 25.9 percent of total tax revenue, with net VAT collections comprising 6.4 percent of GDP for the period.

Corporate Income Tax (CIT), the third largest contributor to total tax revenue for the past decade relative contribution has declined from a peak of 26.7 percent in 2008/09 to 18.1 percent in 2016/17.

Ettiene Retief, the chairperson of National Tax at the South African Institute of Professional Accountants (SAIPA), said the revenue services must be held to the same efficiency standards as the taxpayer. 

“It’s not unheard of for companies to wait many months for a refund to be processed, many turning to the Tax Court or Tax Ombud for relief. The cost in cash flow is a major hindrance to business.” 

“The total cost of tax compliance must be taken into account because it’s a vital factor in judging real efficiency,” Retief said.