Tax growth below GDP growth for the first time since financial crisis, says Sars
Another report shows that SA loses about R7bn annually due to profit shifting by multinational corporations
The failings of the South African Revenue Service (Sars) have again been laid bare following the release of the annual tax statistics, which show that, for the first time since the 2008 global financial crisis, tax revenue growth did not exceed GDP growth. In most instances when GDP increases, tax revenue is expected to follow suit. The National Treasury usually assumes that tax revenue rises by 1.5% for every 1% in GDP growth. According to the tax statistics released on Thursday by the National Treasury, in 2017-2018, tax revenue collected amounted to just more than R1.2-trillion, growing year-on-year by R72.4bn (6.3%), mainly supported by personal income tax, which grew by R37bn (8.7%). In nominal terms, which excludes adjustment for inflation, the economy grew 7%. The statistics show that personal income tax at 38.1%, corporate income tax at 18.1%, and VAT at 24.5%, in aggregate, remain the largest sources of revenue and comprise about 80.7% of total tax revenue collections. Acco...
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