Government has once again exceeded its revenue collection target for the financial year that ended on March 31, indicating an improved performance by the South African Revenue Service (SARS).
Finance Minister Pravin Gordhan on Sunday announced that SARS officials collected R742.7-billion by midnight on Saturday March 31. The figure is R4-billion higher than the revenue target set in the February budget and more than R68-billion more than was collected in the previous financial year.
The budget deficit of 4.8 percent estimated in the budget in February also went down to 4.5 percent. The three main revenue contributors were personal tax, corporate income tax (CIT) and Value Added Tax.
Collections from personal income tax increased from just over R228-billion in the 2010/11 financial year to over R251-billion this year. Companies tax collections increased to R153.747-billion from R134.635-billion in 2010/11.
Gordhan noted that although there has been growth of 14.2 percent year-on-year, CIT remains below the peak of R165.5-billion officials managed to collect in the 2008/09 period.
"This slow recovery of CIT in the main accounted for the current tax to GDP ratio which remained flat," he said. Company tax collections also benefited from the stronger imports in the automotive sector coupled by increased investments in capital intensive industries such as energy, manufacturing and agriculture.
"This is an important indicator of investor confidence in the future of the domestic economy and provides a good platform for future growth," said Gordhan.
Agriculture, mining and telecommunications contributed over R34-billion in taxes combined while banks, insurance and other financial services were taxed more than R40-billion. The manufacturing and petroleum sector contributed over R34-billion to the country's revenue.
Officials note that the past three years saw contraction in the construction sector following the boom period leading to the FIFA soccer world cup hosted in South Africa. This also led to a decline in the manufacturing sector where production volumes are said to be recovering moderately.
"The mining, finance, as well as wholesale and retail sectors showed robust growth on the back of a modest economic recovery," read documents from SARS.
Gordhan said the country's economy grew by 3.1 percent and continued to demonstrate resilience in an uncertain global environment. The domestic environment has also been improving with 20 000 jobs created each quarter.
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