With the much anticipated medium-term budget policy statement set to be delivered on October 26, value-added tax (VAT) figures will be watched with a keen eye.With tax revenue under pressure due to subdued economic growth, VAT plays a pivotal role in the government’s fiscal policies and collection efforts.After personal income tax, VAT is the biggest source of revenue, with corporate income tax reducing further as a percentage of total tax collected due to the moribund economy.VAT has also not escaped the dire consequences of flat growth. Data released by the South African Revenue Service (SARS) after the conclusion of the 2015-16 tax year still indicated higher VAT collections. VAT collections grew R19.5bn or 7.4%, to R280.8bn compared with the previous financial year.But actual domestic VAT collections were flat, with the 7.4% growth partially attributable to lower VAT refunds. VAT refunds, based on input VAT claims, were budgeted at R171bn for 2016, but came in 2.4% lower at R166...
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