Sars misses revenue collection target for fifth year in a row

Personal income tax contributed R493.8bn, VAT R324.6bn, company income tax R214.7bn and customs R55.2bn. File photo.
Personal income tax contributed R493.8bn, VAT R324.6bn, company income tax R214.7bn and customs R55.2bn. File photo.
Image: Reuben Goldberg

Revenue service Sars has once again undershot the Treasury's revenue target.

Sars collected R1.287-trillion for 2018/2019, acting commissioner Mark Kingon said at the announcement of the preliminary revenue results in Pretoria on Monday.

That was R14.6bn, or 1.1%, short of the revised estimate of R1.302-trillion announced in the February 2019 budget, but still represents growth of R71.2bn, or 5.8%, from the R1.216-trillion collected in 2017/2018.

Compared with the initial estimate of R1.345-trillion, this results in a deficit of R57.4bn, or 4.3%.

"The slow improvement in production and employment following poor investment growth in 2018, as well as a moderation in global trade and investment, presented a weaker outlook for the economy," Kingon said.

Revenue collection has fallen short of budget targets over the past five fiscal years. The Treasury expected a R42.8bn revenue shortfall for 2018/2019 from the initial revenue target, which was based on a growth forecast of 1.5% for the year.

Economic weakness has reduced personal income tax and corporate income tax receipts in the past year, but administrative weakness in collection was a contributing factor, the Treasury said in the budget review.

Overall, Sars collected a gross amount of R1.575-trillion, but this was offset by refunds of R287.8bn.

"Although the higher refund payments lowered the net revenue collection for the year, it also puts money back into the economy," Kingon said.

Personal income tax contributed R493.8bn, VAT R324.6bn, company income tax R214.7bn and customs R55.2bn.

Sars has set itself an ambitious revenue target of R1.442-trillion for 2019-20.

The revenue service has been working to restore its credibility but tax morality continues to remain low.

Revenue collection is driven by the state of the economy, fiscal policy and administrative efficiency, but under former Sars commissioner Tom Moyane, who was steeped in controversy, tax compliance was at low levels last seen during the 2008/2009 financial crisis.


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