The South African Revenue Service (Sars) collected 8.3% more personal income tax than in the past tax year, boosted by the 7.5% growth in employment numbers and the 5.3% increase in the country's wage bill.

Personal income tax (PIT) still makes up the biggest portion of all the tax revenues Sars collects at 35.7% or R601.7-billion in rand terms in the 2022/23 tax year. Sars recorded a 4.53% increase in new PIT taxpayers, raising the active taxpayer base to just under 26-million.

"The register grows by millions, but the point we are making is that some are job seekers because some employers insist that before people come for opportunities, they must be registered with us… We were very careful to indicate that it's a smaller [new taxpayer] population that ends up contributing," said Sars chief revenue officer, Johnstone Makhubu.

There were 1.17-million new taxpayers who registered with Sars; however, only 0.5% of those ended up contributing PIT in the past tax year. Makhubu said many people register as taxpayers to get a tax number while looking for work or when they start working. But from the numbers, it's clear that those who wanted tax numbers because they'd found jobs didn't earn enough to pay tax, as only 6 127 ended up contributing PAYE.

This percentage of new taxpayers contributing PAYE is despite the fact that around 200 000 graduates leave SA universities, colleges and other tertiary institutions every year. Many are not absorbed in the labour market for years. And a significant portion of those who do, get into learnerships and internships.

Those who get absorbed in the labour force must earn more than R95 750 a year to start paying tax – the PIT threshold.

Sars said the same goes for new corporate income tax registrations; not all new taxpayers start paying tax immediately. Sars recorded 419 617 new taxpayers in this area in the 2022/23 tax year, largely linked to the Companies and Intellectual Property Commission (CIPC) registrations.

Not only is Sars dealing with the low number of new taxpayers contributing to PIT, but it's also seen a reduction in the compliance index on personal tax, which declined by 4.5 percentage points. Makhubu said Sars has picked up a worrying trend among non-salaried people, including self-employed individuals and freelancers. These are provisional taxpayers who file their returns in February and August.

"That's the grouping that we are worried about, and that's where we think the focus will be. We have done much about pay-as-you-earn or salaried people and have around 75% compliance. But the provisional PIT, we have not seen high levels of compliance," said Makhubu.

He said Sars is considering utilising third-party data to strengthen collection in that segment because it now has enough data to see that it is a worrisome area.