Personal income taxes faring better than corporate taxes
10 November 2015
Posted by: Author: Ntsakisi Maswanganyi
Author: Ntsakisi Maswanganyi (BDlive)
Personal Income Taxes (PIT) are holding up better despite weak economic growth, the South African Revenue Service says in the tax statistics bulletin released on Tuesday.
Tax revenues from corporates are underperforming compared with previous years as a result of weak growth, low demand, rising operating costs, muted global commodity prices, and lingering effects from the 2008 global economic crisis.
"The impact of the global financial crisis has changed the relative contributions of the various taxes over the past five years," Sars said. "The relative personal income tax contribution has increased while the relative corporate income tax contribution has declined."
Government raised personal income taxes this year in hopes to make extra revenue to reduce the large shortfall between its spending and revenue.
Value added tax (VAT) has also held up relatively well compared with corporate taxes. Speculation is rife that VAT will be raised next year.
The contribution of VAT to total tax revenue increased from 25.7% in 2011/12 to 26.5% in 2014/15 while the relative contribution of corporate income tax declined from 20% in 2010/11 to 18.9% in 2014/15.
Personal income taxes contributed 35.9% to total tax revenue.
Tax revenue collected amounted to R986.3bn in the year ended March this year – which was a 9.6% growth on the previous fiscal year.
This article first appeared on bdlive.co.za.