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Praise all round as SARS proves naysayers wrong

Tuesday, 07 April 2015   (0 Comments)
Posted by: Author: Fin24
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Author: Fin24

Naysayers who predicted that recent scandals at the South African Revenue Service would negatively impact revenue collection had to eat their words on Wednesday when SARS announced it exceeded its collection target by R7.3bn.

This not only drew the praise of Finance Minister Nhlanhla Nene but also of SA's largest body of tax practitioners, the SA Institute of Tax Professionals (SAIT), and one of the country's leading tax experts.

SAIT chief executive Stiaan Klue praised "Commissioner Tom Moyane and the 15 000 SARS officials for acting diligently in executing their mandate and surpassing all expectations".

He also thanked all tax practitioners in SA who assisted taxpayers to comply with fiscal laws and submit their returns.

Turning to the difficult economic environment, Nene said Moyane established a comprehensive revenue plan to coordinate all activities linked to overall revenue management. The revenue plan included the establishment of national and regional coordinating committees, and provided strategic guidance to SARS.

Nene pointed towards improved compliance to the tune of R22bn as one of the reasons why revenue collection had continued to remain robust in trying economic times.

Taxman in good working order

Tax guru Professor Matthew Lester told BizNews there is no denying that SARS has been going through a difficult patch, but the taxman is in good working order.

"There was the appointment of (Oupa) Magushula to Commissioner after Pravin Gordhan’s promotion to minister of finance in 2009. That didn’t work. And then SARS sat with an acting commissioner for more than a year thereafter. But SARS has held together. I think that says something about the other 15 000 SARS employees. Well done!"

On Wednesday, Nene announced that SARS collected R986.4bn for the 2014/15 financial year.

While lower commodity prices, sluggish economic growth, labour disputes and electricity supply troubles represented challenges to revenue collection, SARS had outperformed expectations, the finance minister told journalists in Pretoria.

Of the R986.4bn, R353.8bn came from personal income tax (PIT), which came in at 0.9% above the revised estimate in the 2015 budget of R350.7bn. PIT collected over the last financial year was 13.8% or R42.9bn higher than that collected in the previous financial year.

Corporate income tax was 4.1% higher than in 2013/14, coming in at R186.9bn. This was R2.3bn or 1.2% higher than the revised 2015 budget estimate.

Total collections of value added tax (VAT) came in at R261.1bn, 0.2% higher than expected in the revised 2015 budget estimate, with R23.4bn more collected in VAT this year than in the previous financial year, representing a 9.9% improvement.

Government had revised its tax collection target from R993.6bn, announced in the 2014 budget and based on 2.9% gross domestic product (GDP) growth, to R979bn with GDP growth revised to 1.4% in the February 2015 budget.

Moyane, appointed in September last year by President Jacob Zuma, said revenue collection is a function of how the economy is functioning and performing.

"The outstanding returns and revenue numbers you [Nene] have just announced are just a testimony that South African taxpayers have spoken.

"We needed to ensure everyone across SARS was mobilised to meet our revenue challenges. In the last three months, we've had torrid but exciting and uplifting moments which have allowed me a window into SARS."

He expressed his appreciation to every single South African taxpayer who contributed towards revenue collection, since without them SARS would not have achieved its target.

Asked how exactly the increased revenue collection would impact the fiscus going forward, Nene said it was too early too judge.

"The numbers indeed will have a positive impact on our fiscal framework but we wouldn't want to [say] what that impact is right now. These are preliminary numbers. By June we will be in a position to work out what the impact of this performance is going to be on our forecasts and projections," he said.

This article first appeared on



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