National Treasury and the South African Revenue Service have published the annual Tax Statistics for 2019. The 2019 edition provides an overview of tax revenue collections and tax return information for the 2015 to 2018 tax years, as well as the 2014/15 to 2018/19 fiscal years. According to SARS, the 2018 technical recession led to a slow growth in revenue collections, which culminated in a downward revision of revenue targets.
“Whilst revenues generated from the tax system move in tandem with the economy, on average, the growth in tax revenues has been higher than economic growth,” it said.
Tax revenue collected amounted to R1 287.7 billion, growing year-on-year by R71.2 billion (5.9%), mainly supported by Personal Income Tax (PIT) which grew by R30.9 billion (6.7%).
Personal Income Tax (PIT) at 38.3%, Corporate Income Tax (CIT) at 16.6% and Value-added Tax (VAT) at 25.2%, in aggregate remain the largest sources of tax revenue and comprise about 80.1% of total tax revenue collections.
Nominal tax revenue grew at a compound annual growth rate of 6.9% for the period 2014/15 to 2018/19. The tax-to-GDP ratio has increased marginally from 25.5% in 2014/15 to 26.2% in 2018/19 (increase of 0.65 percentage points).
Personal Income Tax
The geographic and demographic analysis of the assessments of the taxpayers who had been assessed as at the end of August 2019 showed some interesting results, SARS said.
- 2,680,449 (54.5%) of assessed taxpayers were male taxpayers; 2,236,580 (45.5%) were female;
- 1,342,511 (27.3%) of assessed taxpayers were aged 35 to 44 years; and
- 1,976,674 (40.2%) of assessed taxpayers were registered in Gauteng, of which 636,460 lived in the Johannesburg Metro and were taxed on an average taxable income of R446,838.
This graph shows how income tax collection looks distributed geographically:
This graph shows how income tax collection is distributed between males and females:
This graph shows how income tax collection is distributed across broad income groups:
This table shows how income tax collection is distributed across narrow income groups:
Statistics regarding corporate tax reveal that out of the 814,151 companies assessed as at the end of August 2019 for tax year 2017, 24.3% had positive taxable income.
Furthermore 48.3% had taxable income equal to zero and the remaining 27.4% reported an assessed loss;
In 2018/19, 77.2% of active VAT vendors were companies or close corporations.
They contributed 92.3% to Domestic VAT payments and accounted for 90.4% of VAT refunds. Although individuals (sole proprietors) comprised 17.3% of VAT vendors, they contributed 3.0% of Domestic VAT payments and received 1.3% of VAT refunds, SARS said.
Import VAT and Customs Duties recorded higher growth rates in 2018/19 compared to 2017/18. They accounted for 13.6% and 4.3% of the year’s Total Tax Revenue respectively, resulting in a 17.9% aggregate, which was in line with the average over the preceding five years.
The share of these taxes to GDP rose to 4.7% from the preceding five-year average of 4.6%, with Import VAT recording 3.6% and Customs Duties at 1.1% for 2018/19.
Import VAT from the top 3 contributing economic sectors made up 87.8% of the total, namely the Wholesale and Retail Trade, Catering and Accommodation sector (Tertiary) at 40.0%, followed by Manufacturing (Secondary) at 30.1% and Financial Intermediation, Insurance, Real-Estate and Business Services (Tertiary) at 17.7%.
The overall effective Customs Duty rate in 2018/19 was 3.1% compared to previous year’s 3.2%. Key commodities with the highest effective Duty rates were Footwear and Accessories at 24.4%; Hides, Skins and Leather at 19.4%; Textiles and Clothing at 15.8%; Food, Beverages and Tobacco at 11.4% as well as Vehicles, Aircraft and Vessels at 7.6%.
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 2018/19, CGT of R17.9 billion was raised of which R9.5 billion was attributable to individuals and trusts and R8.3 billion to companies. This shows a marginal increase of R249 million (1.4%) on the R17.6 billion raised in 2017/18. An aggregate of R142.6 billion has been raised since the introduction of CGT in October 2001, SARS said.
The South African Revenue Service (Sars) said on 23 December 2019, nearly half of companies in the country had no taxable income in 2017 while a quarter recorded a taxable loss.
Sars said its latest data highlighted the impact of weak economic growth. The country’s growth has been forecast at 0.5% this year, which is a significant drop in what was previously predicted. Based on its 2017 data, 48.3% of companies had taxable income equal to zero and 27.4% reported an assessed loss. On the other hand, 24.3% had a positive taxable income.
Companies had up to 12 months from the end of their financial cycles to submit tax returns. Sars said the decline could be largely be attributed to sluggish economic growth, structural challenges in some sectors of the economy, low confidence levels, and political uncertainty.
The tax collector said companies submitting returns fell to 36.9% – or just over two million for the 2018/19 fiscal year – partly due to many being considered “inactive or dormant”.
About 63% – or 572,000 companies – expected to submit returns complied.