3 March 2023 – National Treasury and the South African Revenue Service have published the 15th annual edition of the Tax Statistics.
The 2022 edition provides an overview of tax revenue collections and tax return information for the 2018 to 2022 tax years, as well as the 2017/18 to 2021/22 fiscal years.
The economic recovery from the pandemic differs from previous negative shocks to the economy. After the 2008/09 global financial crisis, it was several years before tax revenue collections recovered to pre‐crisis levels as a proportion of income and consumption. Due to the strong economic recovery from the pandemic , tax revenue increased by R314.1 billion to R1 563.8 billion for the year ending 31 March 2022. The recovery in tax revenue was noticeable across all tax types, but especially for corporate income tax due to the escalation in commodity prices, as well as domestic taxes on goods and services, that were most impacted on by the lockdown measures induced by the pandemic.
Key points in the 2022 edition are:
- Total tax revenue collected by SARS increased from R1 216.5 billion in 2017/18 to R1 563.8 billion in 2021/22, growing at a compound annual growth rate (CAGR) of 6.5% over this period. This is significantly lower than the CAGR of 8.4% attained in the previous five-period from 2012/13 to 2017/18.
- Personal Income Tax (PIT) at 35.5%, Value-added Tax (VAT) at 25.0% and Corporate Income Tax (CIT) at 20.7%, in aggregate remain the largest sources of tax revenue and comprise 81.2% of total tax revenue collections.
- The tax-to-GDP ratio moderated from 23.8% in 2019/20 to 22.3% in 2020/21, followed by an increase to 24.9% in the year under review.
- In Chapter 2: By 31 March 2021, the Personal Income Tax (PIT) register had grown on an annual basis by 4.1% to 23.9 million individuals. The number of individuals expected to submit income tax returns was 7.1 million for the 2018 tax year. This count decreased to 6.8 million for 2020 and then to 6.4 million for 2021, due to the increase in the threshold for submission of returns, over the past few years. The population of taxpayers who were identified to be auto-assessed in the 2020 filing season was significantly expanded to just more than 3.4 million. Assessed data for individual taxpayers indicated that, of the 6 388 532 taxpayers expected to submit returns for the 2021 tax year, 5 508 525 (86.2%) taxpayers have been assessed. Personal income tax, geographic, demographic and other analysis of the assessments of the taxpayers who had been assessed as at the end of August 2022 for the 2021 tax year showed interesting results:
- 2 177 191 (39.5%) of assessed taxpayers were registered in Gauteng;
- 726 663 of assessed taxpayers lived in the Johannesburg Metro and were taxed on an average taxable income of R446 739;
- 1 432 673 (26.0%) of assessed taxpayers were aged between 35 to 44 years;
- 2 859 926 (51.9%) of assessed taxpayers were male; 2 613 130 (47.4%) were female and 35 469 (0.6%) taxpayers couldn’t be identified in terms of gender;
- Assessed taxpayers had aggregate taxable income of R1.8 trillion and tax liability of R388.1 billion. The average tax rate was 21.4% compared to 22.3% the previous tax year; and
- Income from salaries, wages and other remuneration as well as pension, overtime and annuities accounted for 77.2% of total taxable income.
- Statistics in Chapter 3 regarding Company Income Tax (CIT) reveal that out of the 1 028 832 companies assessed as at August 2022 for tax year 2020, 21.4% declared a positive taxable income, whilst 53.2% had taxable income equal to zero and the remaining 25.4% reported an assessed loss.
- Chapter 4 indicates that in 2021/22, 80.0% of active Value-added Tax (VAT) vendors were companies and close corporations. They contributed 92.7% to Domestic VAT payments and accounted for 91.9% of VAT refunds paid out. Although individuals (sole proprietors) comprised 14.8% of active VAT vendors, they only contributed 2.3% of Domestic VAT payments and received just 1.2% of VAT refunds.
- As detailed in Chapter 5, Import VAT and Customs Duties accounted for 13.1% and 3.7% of the year’s Total Tax Revenue respectively; resulting in a 16.8% aggregate, which was below the 17.2% average over the preceding five fiscal years. The combined share of these taxes to GDP increased to 4.2% from the preceding five-year average of 4.0%; with Import VAT and Customs Duties contributing 3.3% and 0.9% for the year respectively.
- For the 2021/22 fiscal year:
- Import VAT was collected mostly from the importation of Machinery and Electronics (25.6%); Chemical Products (14.2%); Vehicles, Aircraft and Vessels (9.7%); Special Provisions (8.9%); Base Metals (7.5%); Plastics and Rubber (5.5%); Textiles and Clothing (5.0%) as well as Mineral Products (4.0%).
- The largest contributors to Customs Duties in 2021/22, were Vehicles, Aircraft and Vessels (22.7%); Textiles and Clothing (17.3%); Food, Beverages and Tobacco (14.8%) as well as Machinery and Electronics (13.3%).
- The overall effective tax rate for Total Import Tax was 11.9% compared to previous year’s 12.0%. Key commodities with the highest effective Total Import Tax rates were Footwear and Accessories at 43.6%; Hides, Skins and Leather at 37.0% and Textiles and Clothing at 30.0%.
- Finally, Chapter 6: Other Taxes and Collections provide information about taxes such as Capital Gains Tax (CGT), Transfer Duty, Mineral and Petroleum Resources Royalty (MPRR), Southern African Customs Union (SACU) payments and Diesel refunds. In 2021/22, CGT of R16.2 billion was raised, of which R7.7 billion was attributable to individuals and trusts and R8.5 billion to companies. An aggregate of R189.3 billion has been raised since the introduction of CGT in October 2001, with R88.6 billion from individuals and trusts and R100.6 billion from companies. Mineral and Petroleum Resources Royalty (MPRR) payments by extractors grew quite substantially by R14.2 billion (100.0%) to R28.5 billion due to a significant improvement in the commodity prices such as platinum, iron ore as well as coal. This growth was at an exponential growth rate when compared to the growth achieved in the 2016/17 financial year of R2.1 billion (56.5%).
The 2022 Tax Statistics documents are available on the SARS and National Treasury website at www.sars.gov.za and www.treasury.gov.za.
SARS and National Treasury welcome public comments and suggestions to continue to enhance the publication’s utility in policy evaluation, and developing new insights into South Africa’s social and economic context. These can be provided via e-mail to [email protected].
To see the Tax Statistics publications, visit the Tax Statistics webpage.
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