Ina Opperman

By Ina Opperman

Business Journalist


Sars collects gross amount of revenue above R1.8 trillion mark for first time

Although Sars collected more revenue over the past tax year, it is important to use it wisely.


The South African Revenue Service (Sars) collected a gross amount of revenue above the R1.8 trillion mark for first time in the tax year that ended last night at midnight, a significant increase from the R1 540.5 trillion collected in the year before.

The tax revenue result of R1.563 trillion represents an increase of 25% or R314 billion compared to the year before and 15.3% growth from the pre-pandemic year of 2019/20.

Announcing the preliminary revenue outcome, Sars commissioner Edward Kieswetter sketched how far the organisation has come since its inception 25 years ago and referred to the rebuilding of the organisation that was again curtailed by Covid-19 and the sharp contraction of tax revenue collections in 2019/20.

“Thankfully we have entered an economic recovery phase and regaining the momentum to rebuild Sars. We certainly cannot claim an uneventful journey. Over the past three years, notwithstanding huge challenges, Sars made significant progress in restoring its integrity, its credibility and its performance. We would be the first to admit though, that we still have a very long way to go.”

Since its formation, Sars collected more than R17.82 trillion and tax net revenue collections grew considerably from R147.3 billion in 1996/97 to over R1.56 trillion in 2020/21 with an annual compound growth rate of 9.9%. 

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This is how much revenue Sars collected

While the revenue estimate at the time of the budget speech in February las year was R1.365 trillion, it was adjusted upwards by R120.3 billion to R1.485 trillion in the 2021 MTBPS and six weeks ago, the finance minister announced an upward revision of a further R61.7 billion in his budget speech in February by R182 billion to R1.547 trillion.

The main sources of revenue were

  • Personal Income Tax (PIT) contributed R555.8 billion (35.5%), up by R67.3 billion
  • Value-Added Tax (VAT) contributed R390.7 billion (25.0%), up by R59.5 billion
  • Company Income Tax (CIT) contributed R323.6 billion (20.7%), up by R119.2 billion
  • Customs duties contributed R58 billion (3.7%), up by R10.7 billion.

Kieswetter pointed out that the steep economic contraction in 2020 due to the pandemic was exacerbated by the unrest in July last year which resulted in the economy becoming 1.8% smaller in real terms than in 2019.

Private consumption in 2021 remained 1% below pre-pandemic levels in real terms, while government consumption remained almost unchanged and government investment contracted. Kieswetter said growth in real household consumption is expected to rebound to 5.7% in 2021 from -6.5% in 2020 and a moderation to 2.0% is expected in 2022.

Consumers will stick to necessities and non-durable goods, as all income groups are reluctant to buy durable goods.

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Contributions to Sars of economic sectors

Various sectors of the economy recovered at different levels and also varied from quarter to quarter. Mining recorded strong real recovery of 11.8% and manufacture recovered by 6.6%, but the construction sector contracted by 1.9%. Only agriculture, mining and personal services exceeded their pre-pandemic levels by the fourth quarter of 2021.

Commodity exports of primarily platinum, iron ore, gold and coal dominated trade, while the country’s imports of mineral products continue to be driven mostly by crude oil. Thanks to the increasing exports the trade account remained in surplus over the past 24 months.

The increase in exports has boosted the profitability of entities trading in precious metals and stones, ores, coal, and vehicles. Imports grew by 27.2%, contributing to an increase in import taxes to above pre-pandemic levels.

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Other performance highlights for Sars

Kieswetter said Sars noted a year-on-year improvement in personal tax payers filing on time of 10.4% and 4.2% for corporate tax. “Our increased focus on revenue collection efforts is yielding pleasing results. This year I can report that just our compliance revenue efforts for the 2021/22 financial year yielded a revenue contribution of R209.7 billion.”

The tax-to-GDP ratio also recovered to a high of 24.7% compared to the long-term average of 22%.

The High Wealth Individuals segment had a year-on-year increase in revenue of R265m, with overall compliance increasing by 4% year-on-year to 91.78%. “The assets of wealthy individuals, whether owned directly or indirectly, reflect more their true tax obligations, than simply income from regular employment,” Kieswetter said.

Early administrative successes include 1.8 million newly registered taxpayers, R7 billion in additional tax payments, over 3 million outstanding returns collected, finalising 1,635 applications for the voluntary disclosure programme.

Sars is currently doing 557 active investigations focusing on the illicit economy to the value of R42,287 billion. The focus areas include fuel, tobacco, alcohol, clothing and textiles, leather and footwear. Revenue recovery amounted to R7.73 billion.

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Not revenue money for jam say the experts

Economist Mike Schűssler said in response to the announcement that we must remember the Sars record is not the result of our hard work but is thanks to the commodity boom. “It is also good news for the rand.”

Prof. Jannie Rossouw, associate professor at the Wits Business School, says the increase in revenue is good news, but government must use it wisely. “Now we can borrow less and use the extra money to pay off our loans.” He says the extra revenue will also come in handy to fill the hole left by lifting the fuel levy for two months. “While it looks like Sars is becoming its old self again, it worries me to hear that it is bullying tax payers by, for example, withholding VAT refunds to make their books look better. Sars should rather go after the tax payers who do not pay at all