The South African Revenue Service achieved collections of R1.144 trillion for the year ended February 2017, Sars Commissioner Tom Moyane announced on Monday.
This was in line with the estimate made by former finance minister Pravin Gordhan in his February 2017 budget speech, he added.
“Preliminary results show that Sars exceeded the revised [made in February] by R300 000,” he added.
However, when compared with the target set in February 2016 of R1.175 trillion during the budget speech, the collection figure of R1.144 trillion missed the target by R30.4 billion.
“This is not the first time that such a large downward revision in revenue estimates was effected. In the 2009-2010 financial year, the revenue estimate was revised downwards by about R60 billion,” Moyane said.
Moyane said that the missed target was due to customs duties being down by R6.5 billion as a result of: a contraction in real terms in imports, Value Added Tax (VAT) being dragged down by import VAT collections to an underperformance of R11.3 billion and the personal income tax target being missed by R15.2 billion.
The tax collections of R1.144 trillion reflected a year-on-year growth of 7% compared with South African real GDP growth of 0.3% during 2016.
“Revenue realisation was made even more difficult given significantly declining consumption levels constrained by an interest rate hike cycle and deteriorating business confidence. The declining currency exchange rate provided real challenges to foreign business exposure,” Moyane said.
He sounded a warning about tax compliance levels, which were beginning to deteriorate.
“We believe that the continuous negative media coverage and comments by those outside Sars over the past 18 months is having a negative impact on taxpayers and tax morality with respect to their confidence in South Africa’s tax system,” Moyane said.
“Media reports stating that ‘the biggest problem we face in South Africa today is an erosion of the integrity of Sars’ have been hugely problematic,” he added.
“We find that suggestion baseless, unfairly subjective and devoid of facts,” Moyane said.
He also denied that Sars had suffered a loss of skills.
For the 2016 tax season, Moyane said Sars received 5.74 million returns by the close of the tax season for non-provisional taxpayers by November 25.
Turning to tax refunds, Moyane said that complaints and frustration of taxpayers about outstanding refunds, especially VAT, had not gone unnoticed.
Moyane said that Sars fully supported the probe by the tax ombud into tax refunds.
“Given the report reports about VAT refunds, we are confident that the results of this investigation will provide the South African public with requisite confidence in the Sars systems,” he added.