South Africa tax revenues fell 15 bln rand short of 2018/19 target

South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg August 13 2014. REUTERS/Siphiwe Sibeko

PRETORIA – South African collected an estimated 1.287 trillion rand ($91 billion) in tax in the 2018/19 fiscal year, about 15 billion rand short of the government’s target, the revenue service SARS said on Monday.

South Africa has seen revenue collections fall consistently since 2015 due to weak economic growth and administrative weakness. The latter issue led President Cyril Ramaphosa to fire Tom Moyane as revenue service boss in November.

“SARS is concerned that the levels of compliance have declined in the last few years and we are seeing the results of that in these figures,” acting tax commissioner Mark Kingon said. Fiscal year 2018/19 ended in March.

South Africa aims to collect about 10 percent more in tax — 1.4 trillion rand — in 2019/20, the revenue service said.

Corporate income tax was down 3.2 percent compared to the estimates made in February’s budget, while personal tax collections were down 1.2 percent compared to target.

“The slow improvement in production and employment following poor investment growth in 2018 as well the moderation in global trade and investment, presented a weaker outlook for the economy,” Kingon said.

In the February budget Finance Minister Tito Mboweni avoided raising income taxes after the treasury hiked value-added tax in 2018 for the first time in 25 years, choosing instead to push up fuel levies and taxes on alcohol and tobacco products.

The moves are expected to raise tax revenue by 15 billion rand in 2019/20 financial year.

($1 = 14.1728 rand)

Reporting by Mfuneko Toyana and Naledi Mashishi, Writing by Tanisha Heiberg, Editing by Catherine Evans

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