The South African Revenue Services (Sars) announced on Monday a R1.144-trillion preliminary outcome for revenue collection for the 20176/17 tax year.

This means that Sars broke the trillion rand mark for the second year in a row, in gross terms standing at R1.367-trillion. Sars said this outcome was fractionally or only R300 000 above the revised estimate as announced in the 2017 Budget.

For the 2016/17 financial year, net revenue grew by 7.0 percent contrasted with a growth in refunds of 9.5 percent year-on-year.

Personal income tax, corporate income tax, and VAT along with Customs and Excise, in aggregate remained the largest sources of tax revenue and represented about 94.5 percent of total tax revenue collections.

Personal income tax collections of R426.0-billion were 9.4 percent higher against the previous year by R36.7-billion mainly due to Pay As You Earn payments.

The financial services sector remained the largest contributor to total net revenue at 49.7 percent, followed by the community and social services, and manufacturing sectors with contributions of 15.3 percent and 10.5 percent respectively.

In aggregate, Sars paid out R222.4-billion in refunds.

A total of R23.0-billion was paid in personal income tax refunds, reflecting a 10.7 percent increase on the prior year. Corporate income tax refunds totalled R13.0-billion, representing about R2.2-billion, or 20.7 percent increase in pay outs compared to the prior year.

The preliminary result would be subjected to detailed financial reconciliation which, in the past, was of the order of approximately R150-million.

Sars pointed to subdued growth in global economic growth for the 2016 calendar year, with global growth easing to 3.1 percent in 2016 from 3.2 percent in 2015.

World trade remained sluggish due to, among other things, primary commodities prices, strong fluctuations in exchange rates of especially developing countries, economic slowdown in China, recessions in developing economies, and financial volatility driven by divergent monetary policies in developed countries.

Sars said these global trends impacted negatively on South Africa’s economy.

Real Gross Domestic Product (GDP) growth for 2016 was revised down from 0.9 percent in February 2016 to 0.5 percent in the February 2017 budget.

Recently StatsSA published the official view for real GDP growth in 2016 at 0.3 percent and nominal growth of 7.1 percent.

Sars said this resulted in a concomitant downward revision in the Revenue estimate from R1.175-trillion in February 2016 to R1.144-trillion in February 2017, a downward revision of R30-billion.

This is not the first time that such a large downward revision in revenue estimates was effected. In the 2009/10 financial year, the revenue estimate was revised downwards by about R60-billion, similarly in line with a decline in GDP outlook then.

Sars said it would continue to provide South Africa with the requisite fiscal space to curtail growth in sovereign debt and sustain the stability of the overall fiscal framework of the country by meeting these challenging revenue estimates.

Looking ahead, Sars said it expected the domestic economy to improve to GDP growth levels of about 1.2 percent based on emerging rebound in commodity prices, the relatively stable international rand exchange rate, low production stoppages associated with industrial disputes, and the recent heavy rainfall that brought relief to the agricultural sector.

Sars said these green shoots would assist it in the revenue collection drive towards the attainment of the printed estimate for the 2017/18 financial year of R1.266-trillion, a required uplift of 10.5 percent over the current year.