Finance Minister Pravin Gordhan, in presenting the annual South African Revenue Service collection figures for the 2012/13 financial year in Pretoria on Tuesday, said the disruptions and unrest in the mining sector had a substantial impact on the economy. He said mining makes a “significant impact” and that in the present economic climate “it is a negativity factor we can certainly do without”.
The mining sector reported losses of R6-billion in provisional tax revenue.
Sars collected about R814-billion, R4-billion over the revised estimate target. The initial revenue target in the 2012 Budget was R826-billion, but was revised down in the October medium term budget policy statement, as a result of slowing GDP growth.
Gordhan said while collecting R12-billion under the original target, he had to commend Sars on still beating its target by R4-billion, considering “a weak global environment and a number of domestic supply side distruptions, particularly in the mining sector, [which] led to a moderation in economic growth from 3.5% in 2011 to 2.5% in 2012”.
Investment by public corporations and higher-than-normal growth in revenue in sectors such as finance, property and business services had helped boost revenue. Employment compensation increased by 8.8%, which also contributed to growth in personal income tax.
Gordhan said the higher revenue collection would contribute to reducing the consolidated government deficit from 5.2% of GDP to 5.1% for 2012-2013 and it could, in fact, reach as low as 5%. Unfortunately this could be on the back of underspending by government in some areas.
“In particular, the withholding of local equitable share funds to municipalities where conditional allocations from previous years have not been fully spent, unspent disaster relief grants, delays in community works programmes, and slower than anticipated spending on school infrastructure backlogs.”
- Personal income tax grew: R276.8-billion was collected, up R25.5-billion (10.1%) compared to R251.3-billion for the previous financial year
- Corporate income tax grew: R161.1-billion was collected, up R7.8-billion (5.1%) compared to R153-billion for the previous financial year
- Value added tax grew: VAT collections were R215.5-billion up R24.4-billion (12.8%) compared to R191-billion for the previous financial year.
A previous version of this story reported mining losses were at R1-billion for the 2012/13 financial year. The correct amount is R11.3-billion. Apologies for the error.