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South Africa Marks Tax Revenue Milestone

by Lorys Charalambous,, Cyprus

05 April 2016

At an April 1 media briefing, the South African Revenue Service (SARS) disclosed that it collected over ZAR1 trillion (USD67.86bn), for the first time, in the 2015/16 fiscal year.

The Ministry of Finance announced that South African tax revenue in the last fiscal year was "marginally more resilient than Government had anticipated." At ZAR1.07 trillion, it was ZAR0.2bn more than estimated at the time of the Budget in February this year.

SARS Commissioner Tom Moyane called the outcome "momentous, historical, and a first for South Africa." He added that the taxes that contributed to the improved revenue performance were personal income tax, with total collections of ZAR389.3bn (ZAR35.3bn higher than in the previous fiscal year), and corporate income tax – ZAR193.5bn was collected (ZAR6.9bn more than in 2014/15).

Finance Minister Pravin Gordhan reminded those attending the briefing that he had had to reduce expected tax receipts in 2015/16 by ZAR11.6bn in his Budget Speech in February. He conceded that tax collections continue to be vulnerable to weaker South African economic growth.

"In the past few years, National Treasury has consistently had to revise down projected tax revenue, in line with weaker economic growth," Gordhan said. "Despite maintaining an expenditure ceiling over the past four years, the shortfall in taxes has produced a persistently large budget deficit."

He added that "notwithstanding today's revenue outcome, the growth expectation of 0.9 percent for 2016 is not nearly enough to generate the kind of revenue that enables us to fund all of Government's programs. Our focus on fiscal commitment should remain. We cannot spend money we do not have."

TAGS: South Africa | tax | fiscal policy | budget | corporation tax | ministry of finance | tax authority | revenue statistics | individual income tax | Africa

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