Slow consumer confidence linked to drop in VAT collection, says Sars

Year-on-year growth for VAT has declined by 0.1%.

Finance Minster Nhlanhla Nene and the SA Revenue Service's top management present the revenue collection figures on 2 April 2018. Picture: @sarstax/Twitter

JOHANNESBURG – The South African Revenue Services (Sars) says that the drop in the collection of Value Added Tax (VAT) can be attributed to the slower recovery of consumer confidence.

Finance Minister Nhlanhla Nene announced the 2017/2018 revenue collection results on Tuesday.

Year-on-year growth for VAT has declined by 0.1%.

“The slower recovery of consumer confidence resulted in lower domestic VAT as more citizens elect to reduce household debt. Sars tax portfolio came in at 8.6%, significantly below the 9.2% levels experienced in the past two.”

The minister added that to increase tax morality, South Africans need to be reassured that their money is being used appropriately.

Sars collected R1,2 trillion, R700 million short of the target set by former Finance Minister Malusi Gigaba.

Nene addressed the media in on Tuesday.

“It’s therefore critical that all taxpayers and citizens are confident that every cent provided to the fiscus will be well spent and that they’ll all be treated with the highest level of service.”

According to Sars, company income tax growth year-on-year dropped by 0.7%.

Nene says that Sars will be holding tax evaders accountable.

“Sars collected R800 million form the National Prominent Individuals Project. This initiative was developed to ensure an end-to-end view of taxpayers with traders, our stakeholders, partners and all South Africans.”