Sars records R280bn revenue loss in April
The South African Revenue Service (Sars) recorded a loss of up to R285bn in revenue in April, the country’s first month under lockdown.
In March, President Cyril Ramaphosa announced a national sate of disaster, subsequently placing the country under a 21-day lockdown in a bid to curb the spread of Covid-19.
The lockdown brought South Africa’s economy to a grinding halt, threatening the collapse of numerous businesses and the loss of jobs across most sectors.
Sars commissioner Edward Kieswetter said on Tuesday there was a 15 to 20% decline in revenue collection.
“That is a function of the sluggish economy but also the impact of lockdown.”
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While many South African businesses have resumed economic activity, the national lockdown has left many others with no choice but to close their doors and retrench their staff. National Treasury and the South African Revenue Service (Sars) briefed the standing finance committee on their annual strategic plans and budgets.
Sars and National Treasury briefed the Standing Finance committee on their annual strategic plans and budgets.
“We see in the first month Pay As You Earn is down by 5.2% compared to prior year. That’s over 65,000 employers, who made payments in April, made no payments this year.
“Our import taxes, we have seen a decline of 19.7% made up of import VAT down 25% and customs duty down by 11.8%.”
He added: “Domestic VAT, there was a month-on-month decline compared to last year of 4.3% and a 13% decrease from about 160,000 vendors last year to 139,000 this year. Of the 139,000 vendors only 105,000 paid an amount equivalent to last year.”
A total of 75% of the vendors contracted in terms of their contribution.
Compared to the same month last year, there was a decrease of 54.7% in excise duty at a tax value of R1.3bn with the decline of R1.7bn on alcohol and cigarettes being offset by a R400m upward correction on the fuel levy.
But Kieswetter says the sale of illicit cigarettes and alcohol contributed to the lackluster revenue collection.
He adds that they are receiving tax payment deferral applications from the affected sectors.