Companies boost SA's coffers
2 April 2007
A growing sense of "South Africanism" among the country's companies - combined with healthy corporate profits - boosted their contribution to SA's tax base from 10% in 1994 to 24% of the total of R493-billion collected by the SA Revenue Service (Sars) in 2006/07.
Preliminary figures provided by Sars on the weekend put South Africa's revenue for the year at more than R3-billion above February's revised estimate of R489.7-billion, and about R37-billion more than the original estimate of R456.7-billion.
Sars said in a statement that the strong revenue yield for 2006/07 was influenced both by stronger than expected economic growth as well as increased investment in the economy by the public and private sectors.
Finance Minister Trevor Manuel, speaking to journalists in Pretoria on Saturday, singled out the contribution of South Africa's companies, saying their developing sense of "South Africanism" amounted to a "very significant change".
Economic growth
The taxes contributed were taxes on profits, underscoring the sustained growth of South Africa's economy over the past few years.
Collected corporate income tax exceeded Sars' target of R116-billion by R2-billion, with Statistics South Africa attributing the increase to an annual growth in total gross operating surplus of 14.5% in 2006/07.
Higher than anticipated corporate profits had a significant impact on the outcome of revenue collection, Sars said. For example, gross operating surplus in SA's mining sector grew by 25% in 2006/07, driven by a boom in commodity prices, while the financial services sector grew by 17% and the retail and wholesale sector by 10%.
Between February and December 2006, the income tax register grew by 7%, while the Pay As You Earn (PAYE) register grew by 6% and the Value Added Tax (VAT) register by 5%.
VAT contributed R134.5-billion to the overall figure, while R15.7-billion came from the now-abolished secondary tax on companies. The fuel levy contributed R21.7-billion, customs duties contributed R23.5-billion, and transfer duties contributed R6.7-billion.
Sars also met its revised target of R16.1-billion from excise duties.
Collections from PAYE also increased significantly, to R133-billion - or 10% of the total - compared to the previous year, while total personal income tax amounted to R140-billion.
A growing number of South Africans are being absorbed into the formal job market, with over 500 000 jobs created each year for the past two-and-half years.
The country's tax register grew by 6.7%, from 4 683 821 people in March 2006 to 4 997 469 in February 2007, while growth in remuneration was about 9%.
Structural changes in South Africa's tax policy environment - including the introduction of capital gains tax and the switch from source- to residence-based taxation - have also significantly broadened the tax base, Sars said.
Source: BuaNews
