Economic Growth Helps SARS Exceed Its Tax Revenue Targets

by Robert Lee, Tax-News.com, London

05 April 2006

South Africa's Finance Minister Trevor Manuel has announced that the South African Revenue Service (SARS) has once again surpassed the government's revenue collection targets, raking in more than R418 billion (US$69.3 billion) in tax revenues by the end of March 31, 2006.

The total is R45.3 billion more than the government's initial projection last year, and still R1 billion more then the revised target announced in the 2006 Budget.

Corporate taxpayers contributed about two-thirds of the R16 billion that was collected on the last day of the financial year.

"This is an extraordinary effort in the face of a formidable target in an optimistic but changing economic environment," Manuel commented in a statement released on Monday.

"This surpasses all previous performances by SARS," he added.

According to Manuel, the increasing tax take can be attributed to rising economic prosperity in South Africa, a higher rate of tax compliance, particularly by large companies, and more efficient tax administration.

"This revenue performance is a credit to all South Africans; in particular the growing number of tax compliant fiscal citizens who contribute their fair share to the growth and development of our country," Manuel stated.

SARS collected R88.79 billion in corporate income tax, well above the February 2005 estimate of R69.62 billion.

R125.4 billion was collected in personal income tax - below the February 2006 estimate of R126.46 billion.

R114.96 billion was collected in value added tax, in line with the February 2006 estimate of R115 billion, and R8.99 billion above the February 2005 estimate of R105.98 billion.

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