Pretoria, 20 December 2018 – National Treasury and the South African Revenue Service have published the 11th annual edition of the Tax Statistics.

The 2018 edition provides an overview of tax revenue collections and tax return information for the 2014 to 2017 tax years, as well as the 2013/14 to 2017/18 fiscal years.

In 2017/18, for the first time since the 2008 global financial crisis, tax revenue growth did not exceed GDP growth. Key points in the 2018 edition are:

• Tax revenue collected amounted to R1 216.5 billion, growing year-on-year by R72.4 billion (6.3%) mainly supported by Personal Income Tax, which grew by R37.0 billion (8.7%):
• Personal Income Tax (PIT) at 38.1%, Corporate Income Tax (CIT) at 18.1% and Value-added Tax (VAT) at 24.5% in aggregate remain the largest sources of tax revenue and comprise about 80.7% of total tax revenue collections.
• Despite tough economic conditions in which real and nominal GDP increased by a modest 1.3% and 7.0%[1] respectively, the Tax-to-GDP ratio decreased marginally from 25.9% in 2016/17 to 25.8% in 2017/18.
• In Chapter 2: PIT, geographic and demographic analysis of the assessments of the taxpayers who had been assessed as at the end of June 2018 showed some interesting results:
• 2 678 743 (54.7%) of assessed taxpayers were male taxpayers; 2 219 822 (45.3%) were female.
• 1 331 419 (27.2%) of assessed taxpayers were aged 35 to 44 years; and
• 1 966 744 (40.1%) of assessed taxpayers were registered in Gauteng, of which 629 113 lived in the Johannesburg Metro and were taxed on an average taxable income of R446 838.
• Statistics in Chapter 3 regarding CIT reveal that just over 24.2% of the 768 687 companies assessed as at 30 June 2018 for tax year 2016 had positive taxable income. A further 48.3% had taxable income equal to zero and the remaining 27.4% reported an assessed loss;
• Net VAT collections totalled R298.0 billion and grew by R8.8 billion (3.1%) compared to the previous year. Domestic VAT, which amounted to R336.3 billion and grew by R14.8 billion (4.6%), was the key driver for the aggregate growth in net VAT. Import VAT collections totalled R152.8 billion and grew year-on-year by R3.5 billion (2.4%). VAT refunds totalled R191.1 billion and grew by R9.5 billion (5.2%).
• Chapter 4 indicates that in 2017/18, 76% of active VAT vendors were companies or close corporations. They contributed 92.0% to Domestic VAT payments and accounted for 89.8% of VAT refunds. Although individuals (sole proprietors) comprised 18.4% of VAT vendors, they contributed 3.1% of Domestic VAT payments and received 1.5% of VAT refunds.
• After experiencing a decline in collections in 2016/17, Import VAT and Customs Duties showed some recovery in 2017/18, as detailed in Chapter 5. They accounted for 12.6% and 4.0% of the year’s Total Tax Revenue respectively, resulting in a 16.6% aggregate, which was below the 18.3% average over the preceding five years. The share of these taxes to GDP also shrunk to 4.2% from the preceding five-year average of 4.6%, with Import VAT recording 3.2% and Customs Duties at 1.0% for 2017/18.
• Import VAT from the top 3 contributing economic sectors made up 88.0% of the total, namely the Wholesale and Retail Trade, Catering and Accommodation sector (Tertiary) at 39.6%, followed by Manufacturing (Secondary) at 30.2% and Financial Intermediation, Insurance, Real-Estate and Business Services (Tertiary) at 18.1%.
• The overall effective Customs Duty rate in 2017/18 was 3.2% compared to previous year’s 3.0%. Key commodities with the highest effective Duty rates were Footwear and Accessories at 22.9%; Hides, Skins and Leather at 18.0%; Textiles and Clothing at 16.0%; Food, Beverages and Tobacco at 11.8% as well as Vehicles, Aircraft and Vessels at 8.2%.
• Finally, Chapter 6: Other Taxes and Collections provide information about taxes such as Capital Gains Tax (CGT), Transfer Duty, Mineral and Petroleum Resources Royalty (MPRR), Southern African Customs Union (SACU) payments and Diesel refunds. In 2017/18, CGT of R17.6 billion was raised of which R10.0 billion was attributable to individuals and trusts and R7.6 billion to companies. This shows a narrow increase of R0.6 billion (3.3%) on the R17.1 billion raised in 2016/17. An aggregate of R124.8 billion has been raised since the introduction of CGT in October 2001.

The 2018 Tax Statistics documents are available on the SARS and National Treasury website at www.sars.gov.za and www.treasury.gov.za.

SARS and National Treasury welcome public comments and suggestions to continue to enhance the publication’s utility in policy evaluation, and developing new insights in South Africa’s social and economic context. These can be provided via e-mail to taxstatistics@sars.gov.za.

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Durban, 23 November 2018 – Earlier today, the South African Revenue Service (SARS) destroyed a number of illegal vehicles as part of a clampdown on non-compliance in various Customs sectors.

This followed a two-day inter-governmental operation in Durban and surrounding areas to tackle illicit trade.

Over the past financial year, KZN Customs officials have confiscated 26 vehicles for various contraventions and these have now been forfeited to the state after following proper legal processes. They have a collective estimated  market value of almost R4 million.

The importation of second-hand imported vehicles is restricted into South Africa. Before the vehicles can be imported into South Africa, the client needs to obtain an import permit from the International Trade Administration Commission and also obtain a Letter of Authority from the National Regulator of Compulsory Specification.

Previously, the seized second hand imported vehicles were sold at Customs auction for export, but these vehicles invariably found their way back into SA. This obviously has an impact on the local vehicle manufacturing industry, which contributes about 7.5% to the country’s gross domestic product. This important industry is hugely impacted by the unfair competition imposed by the influx of second hand vehicles.

Of the 26 vehicles forfeited to the state in this financial year in KZN, four were crushed today with 15 crushed in recent weeks. The remaining ones will be destroyed under Customs supervision in coming weeks.

The same approach will be followed throughout the country, with Gauteng planned next and then Limpopo. There are currently 317 vehicles which have been forfeited to the state nationally this financial year.

The high-visibility two-day operation (20 and 21 November) in the Durban area involved Other Government Departments such as SAPS, Immigration, Cross Border Road Traffic Agency and EThekwini Metro Police.

The main focus of the operation was to clamp down on non-compliance relating to importation/exportation of goods, smuggling of illegal substances and the illegal storage/movement of second hand goods.

It included roadblocks at high risk areas, physical inspections of containers, cargo, bonded warehouses, patrols, vehicle check points, gate checks and vessel rummages.

So far, some of the successes of the operation include:

• Detention of 260 second-hand imported vehicles for further investigation into the validity of their importation. They were detected during inspections at two Customs bonded warehouses on 20 November. These cars are allowed to be in bonded warehouses for two years without having to pay duties. However, the time had expired which means they were contravening their licensing conditions
• Bust of suspected counterfeit clothing and textiles valued at approximately R6 million at King Shaka International Airport (KSIA) on 20 and 21 November. The goods were detected during random inspections in the cargo section at KSIA
• Discovery of 30kg of compressed dagga in a car stopped at a roadblock in Tongaat on 21 November. The dagga, which was packed in suitcases in the boot of the car, was positively identified by Customs detector dogs. It is valued at about R2 million
• A gate check at the Durban harbour on 20 November led to the discovery of suspected counterfeit nappies which were packed into in a 40ft container. A full unpack is being done today to establish their authenticity. 

Working closely with other Government departments, Customs will continue to roll out operations country-wide to address illicit trade along the entire Customs value chain in order to protect the economy and society.

Thursday, 15 November 2018 – Between April and September this year, SARS has achieved 30 successful convictions in Value-Added Tax (VAT) – and Personal Income Tax (PIT) fraud cases, involving R65 billion. This represents a 100% success rate in convictions relating to the fraud cases that were investigated by SARS criminal investigators and finalised by the courts during this time, Ms Mogola Makola, Chief Officer of Enforcement, revealed.  In total, the courts finalised 74 cases during this time, which represents the first six months of SARS’ 2018-2019 financial year. The cases related to charges of bribery, fraud and theft and contravention of the Income Tax Act, VAT Act and Customs & Excise Act. 

Ms Makola released the figures in support of International Fraud Awareness Week, which ran from 7 – 11 November. It is an initiative of the international Association of Certified Fraud Examiners (ACFE). SARS officially supports the ACFE, and has 364 individual members and 25 certified fraud investigators affiliated to ACFE South Africa, the recognised professional body that certifies and governs fraud examination professionals in South Africa.

According to Ms Makola Fraud Awareness Week is recognised globally as one of the most important measures required to combat economic crimes, which are costing the country billions of rand. She appealed to members of the public to make use of the facilities provided by SARS to report suspicious activities as SARS depends on the reporting of economic crimes in order to put a stop to them. 

Currently about 670 cases are being investigated by SARS’ investigators. These include 268 suspected VAT fraud cases and 63 investigations into tax practitioners in connection with suspected abuse of the tax system, for instance, by claiming fraudulent donation, business or medical expense deductions on the PIT returns they submit to SARS on behalf of their clients. VAT fraud mainly takes place through fraudulent refund claims, supported by fictitious entities or on behalf of bogus entities.

A total of 226 fraud cases relating to under or non-declaration of income are also being investigated while 4 encompassing national investigations deal with organised crime syndicates, operating in the tobacco industry amongst others.

A general global increase in fraud is also evident at SARS, Ms Makola said. “The potential prejudice to SARS from cases that were referred to the Criminal Investigations unit in the first six months of the 2018/19 financial year stands at approximately R4,5 billion: marking a 117% increase, compared to the same time the previous year (2017/2018), when the total prejudice from cases referred was approximately R3,3 billion. In the first six months of the 2016/2017 financial year, the prejudice associated to cases that was identified for further investigation was R1,4 billion. Most of these cases deal with VAT and PIT fraud.” 

In step with international trends to increase investment in fraud detection, advances in SARS’ capability to detect fraud is, to a large extent, also responsible for the corresponding increase in the number and value of fraud cases referred to the Criminal Investigations team for further investigation. 

The table below gives an indication of how VAT fraud has increased over the past three financial years.

Increase in convictions in VAT fraud: fictitious entities and fictitious invoices  

Internal fraud

Within our own backyard, SARS follows an emphatic zero tolerance approach to fraud and corruption, Ms Mokola notes. “SARS officials, without fear or favour, are duly reported to the South African Police Service (SAPS) and dismissed for fraudulent or corrupt activities when found guilty.” 

Compared to the first six months of the previous financial year, there has been a sharp increase in the number of employees who have been sanctioned, dismissed or resigned following investigations by the Fraud Investigations Unit. So far this year, SARS has sanctioned 51 employees and dismissed 9 while 31 have resigned in connection with suspected fraudulent activities.

This is mainly due to a sharp increase in resignations (31 for the first six months of this year, vs 13 for the whole of last year). In this regard, we have noticed an increase in unauthorised interference in taxpayer matters, which have increased by 40% to 11 resignations, up from 2 during the previous year.  There has also been a significant increase in resignations related to investigations into abuse of Customs & Excise processes: from 5 in 2017, to 10 in 2018. Customs fraud and corruption remain the biggest internal risk for SARS, she said.

“A positive developing trend is the significant increase in the reporting of suspected criminal activities by SARS employees. Between April and September this year, employees reported 158 or 89% of all cases, compared to only 94 cases reported during the comparative time last year.

“While I believe this is indicative of a desire amongst employees with integrity to rebuild trust in the organisation, it may also indicate that external parties are not using our economic crimes reporting channels to their full potential. In this regard we wish to appeal to the public to report suspected criminal activities of staff members and external parties alike,” Makola said.

She appealed to members of the public to please report suspicious activities by phoning the SARS Anti-Corruption Line on 0800002870, or via the SARS website under Report Tax Crime.

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Pretoria, 1 November 2018 – The South African Revenue Service received 5.785 million returns by Wednesday, 31 October 2018, which marked the close of tax season for non-provisional taxpayers.  

These returns comprise the following:

• 4. 229 million returns by individual taxpayers (returns relevant to the current year)
• 1. 459 million returns by individual taxpayers filed during this Tax Season but relevant to prior years)
• 42 087 returns filed by trusts (returns relevant to the current year)
• 53 973 returns filed by trusts (returns filed during this Tax Season but relevant to prior years)

The number of submissions received this year marks a 2.1% increase from the previous year’s submissions which totalled at 5.665 million returns.  This is despite a shorter filing season.

A total 96.1% of expected returns from individuals were submitted on time, exceeding last year’s rate of 94%. The returns expected are informed by last year’s submissions and IRP5 information from employers, excluding provisional taxpayers.

“We want to thank taxpayers who filed, for doing the right thing and making their contribution to our country.  Our data shows that taxpayers adapted to the shorter filing season and that filing patterns remained steady and on par.” said Acting Commissioner, Mark Kingon.

“For SARS, Tax Season 2018 was about enhancing service and operational excellence, and working smarter.  This is what we will strive to do each year,” he said.

Preliminary Results for Tax Season 2018:

• Refunds:
• R17.9 Billion paid to more than 2 million individual taxpayers
• A total of 96.88% of taxpayers due for a refund that was not routed for audit or risk verification received their refund within the 7 day turnaround time as stated in the SARS Service Charter.
• Assessment of returns:
• A total of 87.02% of tax returns were assessed within 3 seconds, and 91.18% within 24 hours. 
• Electronic channels
• 52.07% (2017: 50.08%) of returns filed was done through SARS eFiling compared to 47.93% filed at a branch.  This shows a 2% increase in the uptake of eFiling
• 241 583 taxpayers used Help-You-eFile service. This shows a 14% increase in the uptake of this service compared to last year
• 73 663 taxpayers used the SARS Mobi App to file returns. This shows a 54.74% increase in the uptake of this channel 

Service and operational enhancements during Tax Season 2018: 

Additional resources

SARS employed a total of 445 temporary workers to assist with the increased numbers during Tax Season. A total of 23 Mobile Tax Units (MTU) provided taxpayer services to outlying areas and captured in excess of 95 000 returns.

Increased Communication ahead of Tax Season

SARS communicated earlier about taxpayer filing requirements and opted for direct and personalised communication with taxpayers in June – a month before Tax Season started.  Tax Season was also launched to the Media on 04 June and officially opened on 01 July. 

Personal Income Tax (PIT) filing confirmation

An App was introduced at SARS branches during Tax Season 2018. The App assisted branch agents to help taxpayers determine whether or not they needed to file a return before joining the queue. This initiative also helped SARS branches to reduce foot traffic thus maximising resource usage. By 30 October 2018, a total of 422 187 determinations had been made through the App and resulted in a total of 222 037 taxpayers not required to file.

Self-help Kiosks

This year SARS rolled out self-help kiosks at the East London, George, Pretoria and Randburg branches.  These kiosks allow taxpayers access to SARS eFiling, major banks and the SARS website, where they can register for eFiling, submit returns and upload supporting documents.   This is part of SARS’ strategy to assist taxpayers to become comfortable and self-proficient in eFiling.

Extended Operating hours

During October, the last month of Tax Season, the SARS contact centre and all 53 SARS branches extended operating hours to Saturdays.  Approximately, 63 000 taxpayers were assisted. Last year only 21 branches operated on Saturdays during the last month. The Contact Centre extended business hours to 6pm during the week in October.

Activities on the last day of Tax Season: 31 October

 

In total of 235 518 returns were filed on the deadline-day with 67% of these submitted via SARS eFiling. 

• A total of 79 692 taxpayers were assisted in branches on 31 October.
• Branches experienced exceptionally high volumes at branches, with the Alberton branch issuing its first taxpayer a ticket at 04h50.
• The Bellville and Richards Bay branches opened their doors before 06h00. A total of 29 other branches and one mobile tax unit started serving taxpayers before 07h00.
• Fourteen branches had assisted taxpayers after 20h00 last night, with the last taxpayer assisted at 22h21.
• The SARS Contact Centre received 85 046 calls between 07h30 and 20h54 on the last day
• The normal operating hours at branches run from 08h00 to 16h00, and for the Contact Centre run from 08h00 to 17h00.

Provisional taxpayers have until 31 January 2019 to file their tax returns via eFiling.