PRETORIA– The South African Revenue Service (SARS) has managed to collect 1.216 trillion Rand (about 102.8 billion US dollars) in the 2017/18 financial year, short of the forecast revised estimate announced by the Finance Minister in his February 2018 Budget speech by 700 million Rand.

Finance Minister Nhlanhla Nene told a media briefing here Tuesday: SARS collected a gross amount of 1,451 billion Rand, which was offset by refunds of 234.3 billion Rand, resulting in net collections of 1,216.6 billion Rand, said Nene, who was flanked by Deputy Minister Mondli Gungubele and acting SARS Commissioner Mark Kingon.

Despite falling short of its target, the SARS said the collection represents a growth of 72.4 billion Rand or 6.3 per cent compared with the 2016/17 financial year.

The main sources of revenue were Personal Income Tax at 462.5 billion Rand (38.0 per cent), Value-Added Tax (VAT) at 297.8 billion Rand (24.5 per cent), Company Income Tax at 220.2 billion Rand (18.1 per cent) and Customs duties at 49.4 billion Rand (4.1 per cent).

The 2017/18 financial year was characterised by distinct and clearly delineated growth patterns. Until December 2017, revenue in aggregate grew by 6.2 per cent year-on-year.

For the period December 2017 to February 2018, revenue growth, on a month-on-month basis accelerated to between 9.5 per cent and 15.5 per cent, strengthening aggregated year-on-year growth to about 7.3 per cent, said Nene.

SARS attributed the strengthening of revenue growth during this three-month period to an improvement in business confidence to levels last seen in 2015, resulting in improved profit outlook and hence provisional payments; strengthening of commodity prices, which buoyed company income tax from especially the mining sector in December 2017; Purchasing Manager’s Index (PMI) which indicated a recovery in the manufacturing sector, which translated in improved company income tax (CIT) from this sector; and the stronger currency towards the latter part of 2017 assisted companies with imports, which benefitted trade taxes.

SARS said the slower recovery of consumer confidence resulted in lower domestic VAT. As a result, domestic VAT grew at a muted level of 4.5 per cent, well below the 8.1 per cent growth seen in the previous year.