The South African Revenue Service (Sars) collected R1.56-trillion in tax revenue for the 2021/22 financial year.

This represents a 25% year-on-year increase on the R1.25-trillion collected in the 2020/21 financial year.

The latest figure also marks a 15.3% improvement on the pre-Covid-19 2019/20 financial year’s tax collection rate.

Sars Commissioner Edward Kieswetter said on April 1 that, while the economy is still recovering from waves of Covid-19 infections and lockdown restrictions, there is nonetheless an emergence of normalised revenue growth.

Refunds in the period amounted to R321-billion.

The gross revenue collection amount of R1.88-trillion was 1.1%, or R16-billion, higher than envisioned in Finance Minister Enoch Godongwana’s 2022 Budget Speech.

The main sources of revenue that contributed to the net R1.56-trillion collected were personal income tax, which was 35.5% higher year-on-year at R555-billion; value-added tax, which was 25% higher at R390-billion; company income tax, which increased by 20% to R323-billion; and R58-billion in customs duties, which was 2.7% higher year-on-year.

Sars, which celebrates its twenty-fifth anniversary this year, has collected R17.8-trillion in revenues between October 1997, when it was established, and March 31 this year.

Net revenue collection has grown ten-fold from R147-billion in 1996/97 to over R1.5-trillion currently, representing a compound annual growth rate of 9.9%.

Kieswetter attributed the “buoyant” revenue collection in 2021/22 to strong economic recovery, which had been boosted by high commodity prices for much of the reporting year. He also mentioned better-than-expected corporate earnings and pent-up demand, which boosted revenue collections. 

It also helped that Sars had broadened its tax base and improved revenue administration.

Kieswetter said Sars’ distinction between tax revenue received and tax revenue that had to be collected through targeted compliance interventions had resulted in the collection of R209-billion, or 13.4% of total revenue collections.

Moreover, the substantial improvement in total tax revenue collections resulted in a 25% tax-to-gross domestic product (GDP) ratio, exceeding the high percentage attained in 2007/08 of 23.8%, given the context of the rebasing of the GDP, signposting a quicker return to pre-Covid pandemic levels.

Kieswetter highlighted that faster progress in implementing structural reforms will contribute to a more durable economic recovery and improved revenue collection.

Sars had also been modernising, appointing additional staff, and intensifying work on curbing criminal activity, which contributed to the revenue collector’s success in 2021/22.

For example, Sars had been implementing suggestions made by the Nugent Commission in terms of management and governance and Sars would next implement recommendations emanating from the Zondo Commission on State Capture.

Kieswetter concluded that Sars’ journey was far from over, adding that it continued to focus fervently on operational improvement.