For the first time in history, the South African Revenue Service (SARS) has exceeded the R2 trillion collective in gross revenue, says SARS Commissioner Edward Kieswetter.
“The gross revenue that we have collected this year of R2.068 trillion represents a year-on-year growth in gross revenue of 9.7%,” SARS Commissioner Edward Kieswetter said on Monday.
Announcing the preliminary revenue outcome for the 2022/23 financial year in Pretoria, he said for the financial year that ended at midnight on 31 March 2023, SARS collected a net revenue amount of R1.687 trillion.
“This represents a year-on-year growth of 7.86% or R123 billion more than last year against a nominal gross domestic product (GDP) growth of around 5.8%. This means that SARS has collected 99.7% of the challenge set by the Minister of Finance in his February Budget statement,” Kieswetter said.
This revenue performance translates to a tax to GDP ratio of 25.4% and a tax buoyancy of 1.36%.
The Commissioner noted that load shedding is having a debilitating effect on the economy of the country and revenue collection.
“The constant electricity disruption is impacting the overall profitability and constrains normal lives and business growth. Equally important, load shedding is also providing opportunities for sub-sectors involved in renewable energy. We are also seeing an increase in renewable energy related imports, which benefits the fiscus,” Kieswetter said.
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Refunds
SARS returned to taxpayers an amount of R381 billion, which represent a year-on-year growth in refunds of 18.7%.
“This is the highest quantum of refunds ever paid out, which is up R60 billion from the prior year. Just in Value-Added Tax (VAT) refunds, the amount of R319 billion represents a growth of 21.5% since of the prior year,” the Commissioner said.
He expressed concern about the abuse and fraud, especially the attack on the VAT refund system.
“We are pleased that the R381 billion returned to the hands of tax payers. This is good for the economy. In fact, refunds this year represent about 5% of GDP.
“It is also pleasing that of this refund, R135 billion has been returned to the hands of medium and small businesses, as well as individual tax payers. This is good as businesses and individuals remain cash strapped,” Kieswetter said.
Trade facilitation
SARS customs facilitated over seven million trade transactions amounting to R3.937 trillion.
“This represents an 18.4% increase from the prior year. Exports amounted to 2.031% and imports to 10.6%, resulting in a trade balance of R125.83 billion. In the current year, trade represents a growth of over 51%, compared to pre-COVID-19 – the 2019/2020 period,” the Commissioner said.
He noted that the trade surplus has contracted from the prior year of R392billion.
“Our programme for Authorised Economic Operators (AEO), which is designed to facilitate trade by providing a green lane experience to license operators, is also important and this year, we have added 13 new and have renewed 31 operating licenses. The total AEO licenses stands at 159 authosised economic operators.
Improvement in compliance
SARS has begun to measure the voluntary compliance as an index.
“An encouraging trend all be it slow is the change in trajectory in the compliance index, which has increased from 62.9% to 63.9% in the current year. The voluntary compliance index developed in 2020 in support of our strategic intent, measures the overall compliance behaviour of tax payers across the compliance value chain and it shows an improvement,” Kieswetter said.
He said SARS is engaging in an active and extensive tax register exercise to ensure that it broadens the tax base and improves compliance.
“Including in our compliance mandate is public confidence. It is important that there is an explicit objective that the public have confidence in SARS.
“It is therefore noteworthy that public confidence in SARS is improving. From the survey conducted, we measured an increase from 71.8% in 2021/2022 to 76.5% in 2022/2023,” Kieswetter said.
The main contributor to the increased score of operation efficiency at SARS has been attributed to tax morality of the public, tax diligence, and accessibility and trustworthiness.
“Interestingly, public confidence in 2019 measured at only 48%, which has improved to 76.5% in the four-year period. Both these measures auger well for an improving compliance environment and in support of our strategic intent of voluntary compliance,” he said.
Kieswetter said the ongoing milestones reached by SARS is an important indicator of the commitment by SARS staff to serve taxpayers and traders with professionalism, commitment, passion and integrity in accordance with the Higher Purpose.
“As we start the new financial year, SARS will continue to explore all avenues of revenue collection. The ever-evolving world of work is presenting new opportunities. This changed environment was never anticipated when we designed products to respond to the challenges in the economy.
“Naturally, the enabling legislative framework will be amended to keep pace with this new environment. We are therefore, among others, refining our tools to cater for the Gig economy and other areas of the digital economy, including looking at the role of media influencers,” the Commissioner said.
