South Africa’s Preliminary Tax Take Beats Estimate

Ntando Thukwana
·1 min read

(Bloomberg) -- South Africa’s preliminary tax collection beat estimates as compliance revenue grew more than a quarter from a year earlier and the number of impermissible refunds increased.

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The South African Revenue Service collected 1.741 trillion rand ($92.6 billion) in the fiscal year through March 31, Commissioner Edward Kieswetter told reporters in Pretoria, the capital, on Tuesday. The period’s tax take was about 10 billion rand more than projected in the February budget, representing a 3.2% increase from the 2023 fiscal year.

The higher-than-anticipated income means the budget deficit as a percentage of gross domestic product for the past fiscal year could be better than the National Treasury’s February projection of 4.9%.

Compliance revenue increased 26.7% to 294 billion rand and 101 billion rand of impermissible refunds was prevented.

The better-than-expected revenue collection came even as logistics constraints and record power outages weighed on businesses. Corporate income tax rose 3.8% from a year earlier, crimped by a 66% slump in taxes from the mining sector.

The data is a further indication that headway is being made in rebuilding a revenue agency that was rendered ineffectual during former President Jacob Zuma’s scandal-marred rule, with a number of inappropriate appointments made to senior posts, some officials forced to quit and key units disbanded.

President Cyril Ramaphosa’s efforts to rebuild the tax agency started with Kieswetter’s appointment in May 2019. It has since sought to enforce tax compliance and set up units to handle the tax affairs of large businesses and high-net worth individuals.

Kieswetter’s term was extended in February for another two years.

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