South African tax collection went over the R1-trillion mark for the 2015/2016 year, an increase of R83,7-billion over the previous year.
According the 2016 Tax Statistics, which provides an overview of tax revenue collection and tax return information, the tax-to-GDP ratio increased from 25,5% in 2014/15 to 26,2% in 2015/16, slightly below the peak of 26,4% achieved in 2007/08.
Revenue growth was mainly supported by personal income tax (PIT), which grew by R35,4-billion (10%).
Meanwhile, the cost of revenue collection ratio decreased from 0,97% in 2014/15 to 0,96%, well within the international benchmark of 1%.
Of the 6 662 490 individual taxpayers expected to submit returns for the 2014/15 tax year, 4 788 334 (71,9%) have been assessed.
A demographic and geographic analysis of assessments at the time of the release of this publication shows that most assessed taxpayers – 1 920 874 (40,1%) – were registered in Gauteng. Of these, 607 092 assessed taxpayers lived in the Johannesburg Metro and were taxed on an average taxable income of R404 430.
Value-added tax (VAT) remained the second largest contributor to total tax revenue for 2015/16, totaling R281,1-billion (26,3% of total tax revenues).
Net VAT collections grew by 7,6% compared to the previous year. Aggregate growth in net VAT revenue was driven by an increase of 10,4% in import VAT payments as domestic VAT payments only increased by 3,7% (due to subdued consumption expenditure by households).
The main sectors that contributed to domestic VAT growth were financial intermediation, insurance, real estate & business services; community social & personal services; and construction.
At 18.1% of total tax revenues, company income tax (CIT) was the third largest contributor to total tax revenue collected in 2015/16.
However, its contribution has decreased significantly, compared to a peak of 26,7% achieved in 2008/09.
About 25% of the 702 395 companies assessed for the 2015 tax year had positive taxable income. A further 47% had taxable income equal to zero, while the remaining 28% reported an assessed loss.
Of the 702 395 companies assessed, 126 400 were assessed as Small Business Corporations (SBCs), which are taxed according to the graduated income tax schedule instead of the corporate income tax rate of 28%.
Import VAT and customs duties, South Africa’s two biggest trade-related taxes, jointly contributed R197-billion (18,4%) to total tax revenue collected in 2015/16. This is in line with contributions in the years following the global financial crisis, with the exception of a 19,5% peak in 2013/14. A total of 289 922 importers were on the register for 2015/16.
Both import taxes showed strong double-digit percentage growth rates from the prior year, driven mainly by gains from exchange rate weakening combined with steady growth in the importation of capital equipment.