The South African Revenue Service (Sars) had by midnight on March 30 collected R493-billion in revenue — R3-billion above the revised 2007 budget estimate of R489,7-billion and about R37-billion more than the original printed estimate of R456,7-billion.
The final outcome of revenue collected may change as a result of further payments made after the books were closed on the last day of the Sars 2006/07 financial year, Sars said at the weekend.
In terms of personal income tax, the revised target of R140-billion was achieved, of which R133-billion is PAYE. The PAYE receipts are primarily due to a growth in employment.
There was also growth in the tax register from 4 683 821 in March 2006 to 4 997 469 in February 2007 — an increase of 6,7% — as well as growth in remuneration (9%).
In terms of VAT, the revised target of R134,5-billion was achieved. The VAT receipts are primarily due to growth in imports of goods and services which rose by 27,6% in 2006 according to the Reserve Bank and a 7,3% increase final household consumption, Sars noted.
The revised target of R116-billion for corporate income tax was exceeded by R2-billion. CIT receipts are primarily due to an annual growth in total gross operating surplus of 14,5% in 2006 according to Stats SA.
The revised target of R15,7-billion for secondary tax on companies was achieved.
The revised target of R21,7-billion in the fuel levy was achieved and the revised target of R23,5-billion in customs duties was exceeded by R400-million.
The revised target of R6,7-billion for transfer duties was achieved and the revised target of R16,1-billion in excise duties was achieved, Sars noted.
Sars said the strong revenue yield for 2006/07 has been influenced largely by two major factors — stronger than expected economic growth that has reached 5% over the past two years and structural changes in the tax policy environment enacted through legislation over the past few years have significantly broadened the tax base, Sars noted.
Sars said that higher than anticipated corporate profits in particular had a significant impact on the outcome of revenue collection.
“For example, the gross operating surplus in the mining sector grew by 25% driven by the boom in commodity prices. The financial services sector grew by 17% and the retail and wholesale sector by 10% which continues to enjoy robust consumption demand,” Sars said.
Collections from PAYE increased significantly to R133-billion or 10% compared with last year. This was influenced by the increasing formalisation of labour.
“The recent labour force survey reveals that a greater number of people are being absorbed into the formal job opportunities and that there is an increasing confidence among job-seekers about their chances to exploit opportunities in the labour market,” SARS commented.
Among the structural changes in the tax policy environment enacted through legislation, are the introduction of capital gains tax and the switch from source to residence-based taxation. Between February and December 2006 the income tax register has grown by 7%, the PAYE register by 6% and the VAT register by 5%, Sars added. – I-Net Bridge