National Treasury and the South African Revenue Service (SARS) have published tax statistics showing that for the first time since the 2008 global financial crisis, tax revenue growth did not exceed GDP growth.
Despite tough economic conditions in which real and nominal GDP increased by a modest 1.3% and 7.0% respectively, the Tax-to-GDP ratio decreased marginally from 25.9% in 2016/17 to 25.8% in 2017/18.
However, tax revenue collected still increased, amounting to R1.22 trillion.
This reflects year-on-year growth of R72.4 billion (6.3%) – mainly supported by Personal Income Tax, which grew by R37 billion (8.7%).
Personal Income Tax (PIT) at 38.1%, Corporate Income Tax (CIT) at 18.1% and Value-added Tax (VAT) at 24.5% in aggregate remain the largest sources of tax revenue and comprise about 80.7% of total tax revenue collections.
Assessments of taxpayers
Geographic and demographic analysis of the assessments of the taxpayers who had been assessed as at the end of June 2018 showed some interesting results:
- 2,678,743 (54.7%) of assessed taxpayers were male taxpayers while 2,219,822 (45.3%) were female;
- 1,331,419 (27.2%) of assessed taxpayers were aged 35 to 44 years;
- 1,966,744 (40.1%) of assessed taxpayers were registered in Gauteng, of which 629,113 lived in the Johannesburg Metro and were taxed on an average taxable income of R446,838.
Statistics regarding CIT reveal that just over 24.2% of the 768,687 companies assessed as at 30 June 2018 for tax year 2016 had positive taxable income.
A further 48.3% had taxable income equal to zero and the remaining 27.4% reported an assessed loss.
The key VAT statistics were as follows:
- Net VAT collections totalled R298 billion and grew by R8.8 billion (3.1%) compared to the previous year;
- Domestic VAT, which amounted to R336.3 billion and grew by R14.8 billion (4.6%), was the key driver for the aggregate growth in net VAT;
- Import VAT collections totalled R152.8 billion and grew year-on-year by R3.5 billion (2.4%);
- VAT refunds totalled R191.1 billion and grew by R9.5 billion (5.2%);
- 76% of active VAT vendors were companies or close corporations. They contributed 92% to Domestic VAT payments and accounted for 89.8% of VAT refunds;
- Although individuals (sole proprietors) comprised 18.4% of VAT vendors, they contributed 3.1% of Domestic VAT payments and received 1.5% of VAT refunds
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)