SA increases use of tax stats to shape policies

Tuesday, December 12, 2017

South Africa is gradually making more use of tax statistics to shape its policies in line with global trends, says the South African Revenue Service (SARS).

“In terms of tax statistics, we are beginning to catch up with the rest of the globe and in some cases, we are overtaking them. Tax statistics increasingly are being used by policymakers and commentators because they present, to a large degree, real time economic data,” said SARS Head of Revenue and Research, Randall Carolissen, on Tuesday.

Carolissen was speaking at the launch of the Tax Statistics 2017 publication at a briefing in Tshwane.

Released jointly by National Treasury and SARS, the publication showed that in the 2016/17 fiscal year, SARS collected tax revenue amounting to R1.14 trillion. This grew year-on-year by R74.1 billion (6.9%), mainly supported by Personal Income Tax (PIT) that grew by R36.6 billion.

The 10th edition of the document showed that in 2016, the tax to GDP (Gross Domestic Product) ratio increased from 25.5% in 2014/15 to 26% in 2015/16 and stabilised at this level in 2016/17, slightly below the peak of 26.4% in 2007/8.

The document showed that the number of individuals registered for income tax increased to 20 million on 31 March 2017, from 19.1 million in the previous year. The increase is due to SARS’ requirement that employers register all employees as taxpayers, regardless of their tax liability.

Increased revenue from PIT, as a percentage of total tax revenue, allowed government to offer large scale tax relief.

The cost of revenue collections ratio decreased from 0.96% in 2015/16 to 0.93%, which is well within the international benchmark of 1%, said Carolissen.

However, Carolissen said the revenue service has seen a slippage in terms of tax return compliance.

“We have seen slippages in compliance. We have seen an increased trend of people not submitting their returns. We’ve seen a trend of people submitting returns with no payments. Not submitting your return is a criminal offence,” said Carolissen.

Personal Income Tax

For the 2016 tax year, registered individual taxpayers were at 19.1 million, with 4.8 million assessed taxpayers. Of those assessed, 19.1% owed the revenue service some tax, while 61.6% received refunds and 19.4% had a zero assessment.

Meanwhile, the aggregated taxable income of those who had been assessed was at R1.4 trillion.

Income from salaries, wages and remuneration, as well as pension, overtime and annuities accounted for 73.5% of total taxable income. Travel allowance of R27.4 billion at 25.7% was the largest of the allowances assessed, while medical scheme contribution paid on behalf of employees was the largest fringe benefit at R48 billion.

Company Income Tax (CIT)

Analysis of CIT returns assessed for the 2015 tax year and CIT collections in the 2016/17 fiscal year showed that CIT was the third largest contributor to total tax revenue collected in 2016/17.

Close to 25% of the 714 422 companies assessed had positive taxable income.

The Tax Statistics 2017 publication also noted that the concentrated nature of the South African economy was evident in that only 340 large companies had taxable income of more than R200 million  and were liable for 56.8% of the CIT assessed.

Valued Added Tax (VAT)

In the 2016/17 year, net VAT collections totalled R289.2 billion growing by 2.9% compared to the previous year. Domestic VAT that amounted to R321.5 billion and grew by 8.1% was the key driver for the aggregate growth in net VAT.

VAT refunds totalled R181.6 billion and grew by 8.7%.

Meanwhile, revenue collected from import taxes, import VAT and customs duties declined by 1% and1.5% respectively. - SAnews.gov.za

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