Over 6 Million South African Tax Returns Go Unfiled

by Robert Lee, Tax-News.com, London

26 October 2005

The number of South Africans tax returns that remain outstanding exceeds the number submitted to the South African Revenue Service (SARS) in the last financial year, despite a record tax take in that year, according to the tax department's annual report.

SARS reported that of the 10.2 million tax returns issued in the 2004/2005 financial year, only 4.1 million were completed and returned, leaving 6.1 million returns unfiled.

Nonetheless, the figures are a slight improvement on the previous year, when 3.2 million tax returns were submitted to SARS, an increase that the department attributed to a new compliance strategy focusing on "multiple offenders".

Despite the increase in outstanding returns, SARS Commissioner Pravin Gordhan announced earlier in the month that a record amount of tax was collected in the year to the end of March 2005.

According to Commissioner Gordhan, the healthy state of the economy contributed to a "dramatic increase" in tax collections, which by the end of March had reached R354.98 billion, (US$53.7 billion), a little under R10 billion higher than the estimated revenue count.

Corporate income tax flows, which performed above expectations, accounted for R71.63 billion of this total, whilst personal income tax collections amounted to R111.7-billion, representing a 9% increase on the previous financial year.

There was also an increase in value added tax revenues, which rose to R98.16 billion, some R2.66 billion above the February 2005 estimate, reflecting strong growth in domestic expenditure. The booming property market also contributed substantially to the record tax take.

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