The South African Revenue Service (SARS) today announced its preliminary revenue collection outcome for the 2023/24 fiscal year.
SARS tax revenue collections have increased from R114 billion in 1994/95, at a compounded annual growth rate of 9.9% and an average tax-to-GDP ratio of 22.2%. To put this in perspective, our collections over the last 4 business days this fiscal year amounted to R114 billion or the total collected in 1995 for the entire year.
As at the end of March 2024, SARS collected a record gross amount of R2.155 trillion, year on-year 4.2% against the nominal GDP of 4.9%. SARS paid out refunds of R414 billion to taxpayers, the highest ever quantum in refunds compared to R381 billion in the prior year, representing growth of 8.6%. This brings the collected net amount to R 1.741 trillion which is almost R10 billion higher than the revised estimate and R54 billion more than last year’s R 1.687 trillion.
Just in VAT refunds the amount of R343 billion represents a growth of 7.5% over the prior year. Total refunds this year, represent about 6% of GDP. It is therefore pleasing that R120 billion and R37 billion of the refund benefit, respectively, were directed to SMME’s and individuals. This is good when business and individuals remain cash strapped.
“Whilst we are pleased that the R414 billion returned into the hands of taxpayers is good for the economy, I remain concerned about the refund fraud and abuse” says Commissioner Kieswetter. In the period under review, SARS was able to prevent the outflow of R101 billion of impermissible refunds.
SARS is determined to make it hard and costly for taxpayers who willfully fail to meet their obligations. The SARS compliance programme contributed R293.7 billion as at end of March (preliminary). This is an increase of R61.9 billion (26.7%) from the previous year’s R231.8 billion.
The Compliance Programme uses data, artificial intelligence and machine learning algorithms to successfully counter criminality and willful non-compliance. These systems also ensure that no legitimate refunds are denied, whilst preventing impermissible and fraudulent refunds.
“SARS is making significant inroads in its litigation strategy which resonates with our strategic objective that seeks to provide certainty and clarity for taxpayers ensuring proper interpretation of tax or Customs laws. ”
In the year under review:
- 110 judgments were handed down in which SARS was successful in 94 cases – resulting in an 84% litigation success rate.
- SARS conducted 871 criminal investigations dealing with Income tax, VAT and PAYE executed, and 294 were handed to NPA. 85 cases where finalised securing guilty verdict direct imprisonment sentences totaling 49 years to be served, 4 acquittals and a conviction rate of 95%.
More than five years ago, State capture left SARS as an organisation in distress and severely compromised. We embarked on a journey to re-imagine the organisation. SARS is succeeding in its strategic intent of building a tax and Customs system that is based on voluntary compliance and sharpening its capability aimed at detection and deterrence of wilful non-compliance.
Rebuilding of SARS entailed broadening the tax base, instilling and improving a culture of voluntary compliance and fiscal citizenship, seamless intersection of people, data and technology to optimally deliver on our mandate and working with all stakeholders in the tax ecosystem and fostering trust and confidence on SARS. We are seeing positive results to this end.
- Tax register grew by 411 000 companies, of which 1,500 contributed R214 million in gross revenues in the year under review.
- 39 900 new employers voluntary registered for PAYE, of which 19 000 contributed R2.7 billion additional tax, totaling R3.4 billion in the year under review.
- Tax register grew by 57 700 new VAT Vendors of which 14,200 contributed R4.4 billion in gross revenues in the year under review.
- Tax register grew by 1.1 million individuals.
Kieswetter, said: “The R21.6 trillion tax collections represents a compound growth of 9.9% per year since the inception of SARS in 1997. This has funded the South African democracy and touched the lives of millions who would be destitute without government support and services. We, who have the privilege to work at SARS are justly proud of these achievements because these efforts contribute directly to nation-building and sustain our democracy.”
He added that the revenue achievements of the past 30 years would not have been possible if it were not for the effective and beneficial partnerships established by working with compliant stakeholders in the tax and Customs ecosystems that deliver maximum benefits for taxpayers, traders, government, and citizens.
He added: “Ultimately, we are augmenting the work of our employees, with the investment in data science, technology, and artificial intelligence, towards the goal of making the fulfilment of tax obligation a seamless process.”
“I would like to express my sincere gratitude to all South Africans, especially compliant taxpayers and traders as well as all SARS employees for contributing to this significant revenue outcome,” he concluded.
