South Africans have once again risen to the challenge of enhancing what President Mbeki called a new "culture of responsibility" and demonstrated an increasing sense of fiscal citizenship.
Today I am happy to announce that by midnight last night, SARS had collected R354,9 billion in revenue. This is almost R10 billion more than the revised revenue target of R345,3 billion that I tabled during my February 2005 Budget speech and R21 billion more than the original printed estimate of R333.7 billion announced in February 2004.
This revenue performance is indeed a credit to all South Africans. THANK YOU SOUTH AFRICA!!
We can be justly proud of an improving trend in compliance to which we are all contributing. This ensures a resilient foundation and sustainable revenue for the second decade of our democracy. Businesses and Individuals are responding in a positive way to the efforts that are spearheaded by the SARS to improve collections and narrow the tax gap.
A buoyant economy and significant consumer spending has made a positive contribution to the improved collections during the past year. In addition, a number of important decisions over the last few years are beginning to bear fruit and enhance the sustainability of the revenue base. Tax and Customs policy changes together with innovative and assertive administrative measures have widened the tax base and enhanced revenue performance.
South Africans will join me in congratulating the 15 000 tax and customs officers of the SARS for their dedication, enthusiasm and hard work. In line with Government determination to improve service to South African citizens, SARS has introduced a new service ethic at their tax and customs offices and through the use of call centres. Businesses are increasingly using the free e-Filing facility. Initiatives focused on taxpayer education, improved service, better debt collection, earlier detection of non-compliance are making huge inroads towards better compliance.
Specific highlights of this year's revenue collections are:
Collections amounted to R110,7b which is in line with the February 2005 estimate. The February 2004 estimate was R105,9b. This was mainly due to higher than expected wage increases in certain sectors and improved compliance.
Corporate Income Tax once again performed much better than expected. R70,6b was collected. The February 2004 target was R 68,8b and the February 2005 was revised to R 65,6b The better performance is a result of the strong growth in the following sectors:
The strength of the rand adversely affected the resources and export orientated sectors. Corporates with exposures mainly to the domestic economies however started to post major profit gains in the second half of the fiscal year on the back of strong domestic demand, offsetting some of the reduced tax receipts from resources and export orientated companies. The active application of Section 19(3) of the Income Tax Act (Adjustment of provisional payments to reflect latest profit positions) ensured the timeous payment of some R 7b. Other compliance efforts, for example, in respect of structured finance schemes, had positive results.
R97,8b was collected. This is R2,3b above the February 2005 estimate and R8,3b above the February 2004 estimate. This reflects the strong growth in domestic expenditure. According to STATSSA retail sales volumes increased by a remarkable 9,5% during the first 8 months of 2004 compared to the same period in 2003 (12,8% in value terms).
R7,7b was collected. This was R100m less than the February 2005 revised estimate of R7,2b and R5.2 billion above the February 2004 estimate.*
R14b was collected. This is in line with both the February 2004 and 2005 estimates.
R18.8b was collected. This is in line with the February 2005 estimate and R1.4b above the February 2004 estimate.
R13,1b was collected. This is R1,6b above the February 2005 estimate and R3,6b above the February 2004 estimate. The growth in custom duties was fuelled by an increase in imported goods for domestic consumption, on the back of the rand strength and higher available disposable income of consumers.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE