Finance Minister Malusi Gigaba (right), Deputy Finance Minister Sifiso Buthelezi and South African Revenue Service Commissioner Tom Moyane (left).
Finance Minister Malusi Gigaba (right), Deputy Finance Minister Sifiso Buthelezi and South African Revenue Service Commissioner Tom Moyane (left).

The Monday media briefing at which the South African Revenue Service (SARS) released revenue collections for 2016-17 put on display much self-congratulation, back-patting and ululating on the part of the SARS folk.

There was much from commissioner Tom Moyane about SARS’s efficiency, relentlessness and resilience, and its extraordinary achievement in meeting its R1.144-trillion target, despite very tough economic times.

Arguably, this was more because the Treasury got it almost spot-on when it revised the original revenue target down by R30bn than because Moyane and those around him are so extraordinary.

In such tough economic times, it is worth being just a little measured, even humble, about having to extract the equivalent of 26% of SA’s GDP from an ailing economy in which many consumers and businesses are taking strain.

Clearly, SARS’s 14,500 employees did work immensely hard to reach the reduced target — and even exceed it, albeit by just R300,000 — by midnight on March 31 and they deserve credit for their efforts.

SA can be thankful, too, that despite the scandals and ructions and skills losses that have marred SARS’s reputation and credibility in recent years, the institution has reserves of strength that have helped to carry it through.

But Moyane’s insistence that the huge R30bn cut that had to be made to the original revenue estimate was entirely the fault of the economy, and nothing at all to do with tax administration (in other words SARS) just made him look defensive.

The macroeconomic factors that saw tax buoyancy fall below 1% for the first time in many years, clearly dominated. But lower levels of compliance were evident, too, as one would expect in tough times — and particularly when times have been pretty tough in SARS itself. And there is some anecdotal evidence that the revenue service resorted to some aggressive moves to meet its target at the last minute.

At least it seems to have tackled the refund issue to some extent, with a year-on-year 9.5% growth in refunds suggesting SARS has been responsive to allegations that it is withholding refunds to try to get its year-end numbers up. That would be most welcome, particularly since there was a 13% increase in value-added tax (VAT) refunds to small and medium vendors, many of whom really depend on that cash flow.

We fear, however, that some of the damage might already have been done. When taxpayers can’t be confident that they will be refunded timeously, they may be tempted to underpay rather than overpay.

Revenue grew 7% overall, even though collections in quite a few of the tax categories fell short of the downwardly revised estimates. Corporate income tax collections were slightly below target; so were the import-related taxes: customs duties and import VAT.

Personal income tax collections fell short of the revised target, too, and while SARS said this reflected lower wage settlements and bonus payments as well as job losses, Moyane also disclosed that provisional tax payments in February had been particularly poor.

Whether that’s about the economy or about SARS’s own inability to get increasingly disaffected high-net-worth individuals to pay up is not clear.

But the big item that rode to the rescue was the February budget increase in dividend tax, which seems to have prompted a rush to distribute profits and pay dividends ahead of the new tax rate being imposed.

That’s surely not the kind of tax behaviour SARS should be encouraging. And while it helped reach the revenue target, it won’t be repeated.

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