By midnight on Saturday 31 March SARS had collected R495.1 billion in revenue for the 2006/07 fiscal year. This figure – which will remain a preliminary figure until a final external audit is completed later this year - is R5.5 billion more than the revised revenue target announced in this year’s Budget.

According to Finance Minister Trevor Manuel, the higher tax take has come about because of stronger than expected economic growth driven mainly by domestic demand and enhanced investments in the economy by the public and private sectors.

Furthermore, 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.

Collections from PAYE increased significantly to about R133 billion or 10% more compared to 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.

Meanwhile, structural changes in the tax policy environment enacted through legislation over the past few years have significantly broadened the tax base. Such changes include 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%.