Cape Town: The South African Revenue Service (SARS) has expressed support for the Medium-Term Budget Policy Statement (MTBPS) presented in Parliament by Finance Minister Enoch Godongwana. The MTBPS has revised the February 2024 Budget net tax revenue forecast from R1.863 trillion to R1.8408 trillion.
According to South African Government News Agency, as of 30 September 2024, SARS has collected a gross revenue of R1,070.4 billion, which translates to a net revenue of R846.2 billion after refund payments amounting to R224.3 billion. The revenue performance has seen a positive impact from stronger collections in Corporate Income Tax (CIT) provisional tax and lower-than-expected refund payments for VAT and Personal Income Tax (PIT). However, this performance was offset by lower collections from Customs taxes, PAYE, and the General Fuel Levy.
Adjustments in several areas have been noted. The nominal wage bill estimate was reduced from 8.4% in the 2024 Budget to 5.5% in the MTBPS 2024, and there is a slower grow
th in capital projects across various sectors. Additionally, the outlook for nominal exports and imports has been revised downward, affecting trade tax performance.
SARS reported that CIT provisional tax collections reached R150.2 billion, exceeding expectations by R8.8 billion. However, the Mining sector faces challenges due to volatile commodity prices and logistical issues, impacting profitability and provisional payments. Despite concluding significantly more debt cases, SARS’s debt compliance efforts have shown lower returns year-on-year.
SARS Commissioner Edward Kieswetter emphasized the importance of voluntary compliance in achieving the 2024/25 tax revenue estimate of R1 840.8 billion. He highlighted the critical role of taxes in supporting vulnerable communities and stressed the agency’s commitment to using data science and artificial intelligence to improve compliance and service.
SARS plans to broaden the tax base through third-party data sources, enhance its detection capabilities, and enforce
trade laws against illicit activities. The agency also aims to foster dispute prevention and resolution to ensure a seamless service for honest taxpayers.
In anticipation of future economic growth, SARS expects that potential interest rate cuts will boost consumption expenditure and broaden the tax base. The introduction of the ‘Two-Pot’ system is also projected to expand the tax base in the coming years.
Despite challenges, SARS remains optimistic about meeting the revised revenue targets, with its 12,821 staff members dedicated to achieving these goals.