The South African Revenue Service (Sars) collected R814.1-billion during the 2012/13 financial year, R4-billion above the revised estimate provided in the February 2013 Budget and has reduced its debtors book, for the first time in its history.

Finance Minister Pravin Gordhan stated at a media briefing on Tuesday that the tax collector’s debtors book, which consisted of all outstanding assessed tax debts for which payments are overdue, was reduced by R6-billion to R82.5-billion.

“The current ratio of outstanding debt to total revenue is around 10% and Sars will continue to reduce outstanding tax debt to a ratio of 6% over the next five years,” he noted.

Meanwhile, the initial tax revenue target Gordhan set in the 2012 Budget was R826.4-billion, but this was revised downwards twice during the course of the fiscal year, as gross domestic product (GDP) growth slowed, particularly during the last quarter of 2012. The final revision resulted in a target of R814.1-billion.

The total revenue for the year represented an increase of R71.5-billion over the previous financial year’s R742.6-billion. The three main revenue contributors for the year included personal income tax, where total collections amounted to R276.8-billion, compared with R251.3-billion for the previous financial year, and R2-billion above the Revised Estimate in the 2013 Budget.

Corporate income tax (CIT) generated R161.1-billion, up from R153.3-billion during the previous financial year, and R3.4-billion above the revised estimate in the 2013 Budget.

Value-added tax (VAT) collections totalled R215.5-billion, marking an improvement from R191-billion for the previous financial year. However, VAT receipts were marginally lower by R1.6-billion against the revised estimate in the 2013 Budget.

“This preliminary revenue outcome represents growth in collections of R71.6-billion compared with the previous financial year and it exceeds the combined contribution of real GDP growth of 2.5% and inflation of 5.6% by 1.5%,” Gordhan put forward.

Main economic drivers during the 2012/13 financial year included the weak global environment and a number of domestic supply-side disruptions, particularly in the mining sector, which led to a moderation in economic growth from 3.5% in 2011 to 2.5% in 2012.

Gordhan noted that this negatively affected job creation and corporate profits, leading to a downward revision of revenue estimates during the 2013 Budget.

Despite this, robust investment by the public corporations provided support to import growth, which led to strong growth in import VAT and revenue from import duties, while some sectors such as finance, real estate and business services recorded higher-than-average growth.

With the exception of CIT for Large Corporates all taxes recovered to precrisis levels. Specifically CIT from small and medium-sized enterprises recovered more favourably, having grown over the past year by 13%.

Most of the negative impact on CIT collections can be accounted for by the poor performance in the mining sector and the direct consequences of unprotected strikes in the industry. The direct and indirect impact on tax revenue is estimated to be above R11.3-billion.

Sars’ compliance division set itself a target to recover R1-billion in outstanding debt, which it exceeded by collecting R1.06-billion.

Gordhan indicated that despite the continuing challenging economic conditions in South Africa and the world, tax revenue growth remained resilient in 2012/13.

“In a very challenging economic environment, Sars has achieved a truly remarkable result, which has a positive impact on the fiscus. Government remains steadfast in the fiscal trajectory announced in the 2013 Budget. We will continue to improve efficiency in spending, always looking for the best possible value for money,” he assured.

Sars commissioner Oupa Magashula indicated that the revenue service would target R898-million in revenue income for the current financial year.

He added that a lot of hope rested on Sars’ compliance programme, which it had launched last year. “We hope this will close the gap between what we collect and what is out there.”