1 April 2022 – In its 25th anniversary year, the South African Revenue Service (SARS) is pleased to announce the preliminary tax revenue collection outcome after the second year of national COVID-19 lockdown regulations. It should be noted that these are preliminary results, which will be subject to detailed financial reconciliation and a final audit.
In the financial year 2021/22 economic activities rebounded strongly after the easing of the COVID-19 lockdown regulations. In addition, tax administrative enhancements resulted in gradual improvements in overall compliance levels and hence a stronger recovery in tax revenue collected. Social assistance to the poor and vulnerable and tax relief measures supported earnings as well as spending in the economy which, underpinned the performance in personal income tax and value added tax.
SARS collects tax revenue to serve a Higher Purpose, which is to enable government to build a capable state and strengthening the foundations of our democracy. Through effective and efficient delivery on its mandate, SARS continues to support government programmes as a catalyst to growing the economy and bettering the lives of all South Africans. The implementation of SARS Vision 2024 is a strategic journey well on course towards rebuilding a Smart and Modern SARS with unquestionable integrity, trusted and admired. This journey enables SARS to raise increased revenue in an equitable, efficient and unbiased manner to support South Africa’s development objectives. Over the past two years, tax policy has focused on broadening the tax base, improving revenue administration and reducing the tax burden on the tax base to stimulate economic growth. We now turn to the revenue performance for the financial year 2021/22.
For the period ending 31 March 2022, SARS collected a gross amount of R1 884.9 billion (R1 540.5 billion in the prior year). Offset by refunds of R321.1 billion (R290.7 billion in the prior year), this results in net collections of R1 563.8 billion, which represented a surplus of R314.0 billion (25.1%) against the prior year 2020/21.
Measured against the Budget Estimate of R1 547.1 billion, this results in a surplus of R16.7 billion (1.1%). The main sources of revenue that contributed to the R1 563.8 billion collected were Personal Income Tax (PIT), which contributed R555.8 billion (35.5%), Value-Added Tax (VAT) contributing R390.7 billion (25.0%), Company Income Tax (CIT), which contributed R323.6 billion (20.7%) and Customs duties contributed R58 billion (3.7%).
SARS had collected R16.3 trillion since October 1997 when it was established up to 31 March 2021. Adding today’s preliminary figure, for the 2021/22 financial year this amount now stands at R17.8 trillion.
Revenue collections have been buoyant because of strong economic recovery boosted by elevated commodity prices for much of the reporting period. Better than anticipated corporate earnings supported CIT and PAYE collections, while stable interest rates and pent-up demand shored up VAT collections. In line with our strategic intent of inculcating Voluntary Compliance, SARS continues in its endeavours to make it easy and simple and less costly for taxpayers to comply with their tax obligations. But SARS also makes it hard and costly for taxpayers that deliberately do not want to comply. We have made a distinction between tax revenue received (for example monthly PAYE payments) and tax revenue that we collect through targeted compliance interventions.
In the year under review, these compliance interventions resulted in the collection of R209.7 billion, representing 13.4% of total revenue collections. The substantial improvement in total tax revenue collections resulted in a 25.0% tax-to-GDP ratio, exceeding the high percentage attained in 2007/08 of 23.8%, given the context of the rebasing of the GDP, signposting a quicker return to pre-Covid pandemic levels. Faster progress in implementing structural reforms will contribute to a more durable economic recovery and improved revenue collection.
There are other internal factors that have contributed to our improved revenue collection. The information and technology infrastructure has been modernised, additional skilled staff were employed, the multi-year customs modernisation programme is under way, and work has been intensified to counter criminal and illicit activity. The majority of the Nugent Commission recommendations to address management and governance failures at SARS have been implemented. The next step is to support and act on recommendations emanating from the Zondo Commission on state capture. SARS continues to strive towards serving the people of this country effectively and efficiently in pursuit of the higher purpose of assisting the government to create a capable state. Over the years, SARS has made remarkable progress in restoring its integrity, its credibility and its performance.
SARS thanks all South Africans and corporate citizens for your support so that our country will realise its full potential and be the country that we as stewards can all proudly bestow to future generations – a country that works for all its people.
REVENUE TABLES
Table 1: Revenue collection 2021/22 against Revised Budget 2022 Estimate
1 Includes interest on overdue tax
2 Specific Excise Duties comprises excise on domestic goods only
3 Customs Duties comprises duties on imports, specific excise on imports and ad valorem duties on imports
Table 2: Revenue collection 2019/20 to 2021/22 and variance in Rand million and Percentage
1 Includes interest on overdue tax
2 Specific Excise Duties comprises excise on domestic goods only
3 Customs Duties comprises duties on imports, specific excise on imports, and ad valorem duties on imports
4 Total Tax Revenue on a cash basis
5 Total Tax Revenue on a cash basis
6 Total Tax Revenue on a cash basis
For more information, see 2022 SARS FY graphs as on 1 April 2022.
SARS Commissioner’s speaking notes.
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