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The taxman saw a R72.4-billion growth in revenue collection. This was announced by Finance Minister Nhlanhla Nene on Tuesday.
Nene lauded President Cyril Ramaphosa’s inaugural state of the nation address, former finance minister Malusi Gigaba’s budget speech and the Moody’s “Baa3” rating of South Africa’s currency debt as the catalysts behind the growth.
He was speaking a media briefing on the preliminary outcome of revenue collection for the 2017/2018 fiscal year.
Here are 10 things to take away from the minister’s announcement:
1) The South African Revenue Service collected R1.217 trillion in the financial year 2017/18.
2) The preliminary result was within 0.06% of the forecasted estimate of R1217.4 billion announced by former Finance Minister Malusi Gigaba in the 2018 budget speech.
3) The overall amount collected (R1.217 trillion) represents a growth of R72.4 billion (6.3%) compared with the 2016/17 financial year.
4) Sars collected a gross amount of R1.45 trillion, which was offset by refunds of R234.3 billion, resulting in net collections of R1.217 trillion.
Source of this revenue:
5) This revenue injection was money collected from working South Africans.
Reasons for the growth in revenue:
6) An improvement in business confidence to levels last seen in 2015. This was due to resolutions from the December conference, the resignation of former president Jacob Zuma and the new dawn promised by the new ANC leadership.
7) Strengthening of commodity prices, which buoyed company income tax, especially from the mining sector, in December 2017.
8) Purchasing manager’s index, which indicated a recovery in the manufacturing sector, which translated in improved company income tax from this sector.
9) The stronger currency towards the latter part of 2017 assisted companies with imports, which benefited South Africa’s trade taxes.
The main sources of revenue contributed to the R1.217 trillion collected were:
10) Personal income tax, which contributed R462.5 billion (38.0%), value added tax which contributed R297.8 billion (24.5%) and company income tax, which contributed R220.2 billion (18.1%). The other R49.4 billion (4.1%) came from customs.
Nene pointed out that these results were very close to the forecasted estimate of R1.217 trillion announced by former finance minister Malusi Gigaba in his 2018 budget speech.
“This revenue injection represents money that comes from ordinary, hard-working South Africans and demonstrates our resilience as a nation to overcome obstacles and challenges, and our commitment to protect and deepen our democracy,” said Nene.
The minister expressed hope that today’s announcement and the manner in which Sars had achieved this milestone, under difficult circumstances, would restore some trust and credibility in both the government and the revenue authority.
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