revenue results for the fiscal year 2006/07
31 March 2007
The South African Revenue Service (SARS) has by midnight on Friday, 30 March
2007 collected 493 billion in revenue.
These preliminary results are more than 3 billion above the revised 2007
Budget estimate of 489,7 billion and about 37 billion more than the original
printed estimate of 456,7 billion.
The final outcome of revenue collected may change as a result of further
payments made after the books were closed on the last day of the SARS 2006/07
financial year.
The revenue performance lays the foundation for government to realise its
ambition to create the fiscal space needed to improve the lives of all South
Africans.
Over the past few years government's fiscal strength has enabled us to
improve expenditure on social delivery and investment in infrastructure.
The strong revenue yield for 2006/7 has been influenced largely by two major
factors:
1. Stronger than expected economic growth that has reached 5% over the past
two years; driven mainly by domestic demand and enhanced investments in the
economy by the public and private sectors.
Higher than anticipated corporate profits in particular had a significant
impact on the outcome of revenue collection. For example, the gross operating
surplus in the mining sector grew by 25% driven by the boom in commodity prices
the financial services sector grew by 17% and the retail and wholesale sector
by 10% which continues to enjoy robust consumption demand.
Collections from Pay As You Earn (PAYE) increased significantly to 133
billion or 10% compared to last year. This was influenced by the increasing
formalisation of labour. The recent Labour Force Survey reveals that a greater
number of people are being absorbed into the formal job opportunities and that
there is an increasing confidence among job-seekers about their chances to
exploit opportunities in the labour market.
2. Structural changes in the tax policy environment enacted through
legislation over the past few years have significantly broadened the tax base.
Such changes include the introduction of Capital Gains Tax, the switch from
Source to Residence based taxation. Between February and December 2006 the
income tax register has grown by 7%, the PAYE register by 6% and the Value
Added Tax (VAT) register by 5%.
The government wishes to express its heartfelt gratitude to all South
Africans who have shown commitment to build a better life for all. SARS' work
is a credit to all of them.
We are also proud of the dedication and commitment of a 15 000 strong team
of SARS employees to make South Africa great.
An analysis of the preliminary revenue results indicates:
1. Personal Income Tax (including interest)
The revised target of 140 billion was achieved, of which 133 billion is
PAYE. The PAYE receipts are primarily due to a growth in employment as
evidenced by several factors including:
The Labour Force Survey released by Statistics South Africa (StatsSA) this
week.
Growth in the tax register from 4 683 821 in March 2006 to 4 997 469 in
February 2007 (an increase of 6,7%).
Growth in remuneration (9%)
2. VAT
The revised target of 134,5 billion was achieved.
The VAT receipts are primarily due to the following factors:
* Growth in imports of goods and services which rose by 27,6% in 2006
according to the SA Reserve Bank
* 7.3% increase final household consumption.
3. Corporate Income Tax (CIT) (including interest)
The revised target of 116 billion was exceeded by 2 billion.
CIT receipts are primarily due to an annual growth in total gross operating
surplus of 14,5% in 2006 according to StatsSA.
4. Secondary tax on companies
The revised target of 15,7 billion was achieved.
5. Fuel levy
The revised target of 21,7 billion was achieved.
6. Customs duties
The revised target of 23,5 billion was exceeded by 400 million.
7. Transfer duty
The revised target of 6,7 billion was achieved.
8. Excise duties
The revised target of 16,1 billion was achieved.
Enquiries:
Adrian Lackay
SARS Communications
Cell: 083 388 2580
Issued by: South African Revenue Service
31 March 2007
