2013 - 2014 Presentation to the Standing Committee on Finance 14 - - PowerPoint PPT Presentation
SOUTH AFRICAN REVENUE SERVICE ANNUAL REPORT 2013 - 2014 Presentation to the Standing Committee on Finance 14 October 2014 Introduction - Highlights for the Year SARS Annual Report for the year ending 31 March 2014. Progress against the
SOUTH AFRICAN REVENUE SERVICE
Presentation to the Standing Committee on Finance
– SARS collected R900 bn; – R1.0 billion in excess of the revised target of R899 bn; – Representing 26% of GDP.
– SARS total expenditure - 0.97% of the total tax revenue – in line with international trends; – The staff complement 14 137
– 21.4 million in total; – Comprising 16.8 million individual taxpayers
– Over 6 million income tax returns for the year; – Over 2.7 million VAT returns; – Over 4.7 million PAYE returns; – Nearly 24 million lines of customs declarations; – SARS processed all personal income tax returns in an average of less than one day.
– Nearly 1.8 million audits of various types, and – 333 investigations into possible serious tax and customs offences. – Debt grew by R386 million
In pursuit of its mandate, SARS continued to foster and expand ties with tax and customs administrations and international organisations
– The tax base is threatened by corporations shifting profits to locations with low or no income tax – This concern is underlined by SARS’ involvement in the BEPS project of the Organisation for Economic Co-operation and Development (OECD) – SARS continued to co-chair the OECD’s Task Force on Tax and Development
– SARS launched a pilot project with Swaziland and Mozambique – To establish a IT network that links regional customs authorities – Will enable the electronic transfer of information between customs authorities
– SARS continued to chair ATAF – To strengthen tax administration in our region and the continent, a number of training workshops and conferences were conducted – These activities are aimed at: → Improving Africa’s ability to mobilise domestic revenue → Combat international harmful tax practices
Source: SARS Annual report p.12, 47
– South Africa supports this initiative to make the world more tax transparent, i.e. to ensure taxpayers pay their fair share around the world – The forum consists of 122 member jurisdictions and is chaired by SARS’ chief legal officer,
– SARS participated in the WTO’s Ninth Ministerial Conference (Bali, December 2013) – The Agreement on Trade Facilitation was adopted – SARS is an active member of the World Customs Organisation
– Negotiations concluded to establish an electronic interface with the Internal Revenue Service (IRS) – To exchange data in compliance with the USA FATCA
Community (SADC) and the Southern African Customs Union (SACU)
Source: SARS Annual report p.12, 39
14.5% Of cargo declarations targeted (against a target of 12%) The main reason for the higher than expected alert ratio is the following:
adjusted according to the new rate of
the number of alerts.
tyres VAT 56.9% VAT returns filed on time (0.7% decline) The modernisation of VAT make it easier for taxpayers to submit their returns and to improve the accuracy of its VAT register. However, despite an initial improvement filing compliance among VAT vendors remains a concern. VAT refunds processed within an average
21 working days) The increased scrutiny on old refunds submitted in current year as well as refunds held back due to Investigations caused the refund turnaround time to be high. Achievement against target Commentary on performance
Source: SARS Annual report
114 127 147 165 185 201 220 252 282 302 355 417 496 573 625 599 674 743 814 900
Total tax revenue collected R billion SARS has achieved double- digit revenue collection growth since 1994
Source: SARS 2013/14 Annual report pg. 17 SARS internal data
+11.6% p.a.
Annual growth in tax collections Percentage (%)
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 South Africa (RHS) 17.5% 18.8% 15.6% 9.1%
12.6% 10.2% 9.6% 10.6%
PIT, 34.5% CIT, 19.9% VAT, 26.4% STC/DT, 1.9% Fuel Levy, 4.9% Customs Duty, 4.9% Other, 7.4%
Source: SARS 2013/14 Annual report pg. 17
572.8 625.1 598.7 674.2 742.7 813.8 900.0
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 100 200 300 400 500 600 700 800 900
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Total tax revenue Tax to GDP ratio
Tax to GDP ratio R billion %
Source: SARS 2013/14; Annual report pg. 18
Overdue Debt
Source: SARS 2013/14; Annual report pg. 31 0% 5% 10% 15% 20% 25% 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000
Debt Excluding Admin Penalties, Estate Duty, Small Business Amnesty Levy and Donations Tax Debt Including Admin Penalties, Estate Duty, Small Business Amnesty Levy and Donations Tax Debt Including Admin Penalties, Estate Duty, Small Business Amnesty Levy and Donations Tax as % Of Revenue Debt Excluding Admin Penalties, Estate Duty, Small Business Amnesty Levy and Donations Tax as % Of Revenue
*Customs Revenue consists of Import VAT, Customs Duties, Miscellaneous customs & excise and Incandescent light bulb levy. Source: SARS 2013/14; Annual report pg. 20,21
Performance and organisational highlights
Source: SARS 2013/14; Annual report pg. 25-39
Tax Revenue (Excl. Customs) amounted to R724.2 billion (R435 million below target) PIT R310.9 billion (12.4% growth) CIT R179.5 billion (11.6% growth) VAT R21 billion (8.7% growth) Taxpayer register Total SARS register - 21.4 million registered taxpayers and traders (9.8% increase) Income Tax for Individuals register, 16.8 million (8.8% increase) Filing on time PIT 91.53 % (5.4% improvement)
Performance and organisational highlights
Declaration Compliance Total audit cases completed 1.8 million (14% increase) 267 Criminal prosecutions received a guilty verdict Filing season 6.1 million returns received in filing season – 7.7% higher than 2012/13 99.85% income tax returns assessed within 24 hours 94.98% income tax refunds paid within 72 hours of submission
Source: SARS 2013/14; Annual report pg. 25-39
Performance and organisational highlights
Source: SARS 2013/14; Annual report pg. 40-43
Assisted Government to prepare for introduction of the TAA by implementing a formal communications structure with the Ombuds office eFiling enhanced by introducing a facility that enables taxpayers to submit supporting data from third parties
Performance and organisational highlights
Source: SARS 2013/14; Annual report pg. 40-43
Electronic links with the Companies and Intellectual Property Commission (CIPC) and Department of Home Affairs (DHA) established – enable it to validate entity details with information held by these State agencies Tax Clearance Certificates (TCCs) process transformed from a predominantly manual process to a taxpayer-driven, self-help, electronic process
Performance and organisational highlights
625 599 674 743 814 900 0.97% 0.6% 0.7% 0.8% 0.9% 1.0% 1.1% 1.2% 1.3% 1.4% 1.5% 100 200 300 400 500 600 700 800 900 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Tax revenue Cost to tax revenue ratio
Outcome 4 : Increase cost effectiveness, internal efficiency and institutional respectability
Cost of revenue collection R billion %
Most countries’ ratio ranges around the international benchmark of 1%, with USA at a low of 0.6 % and Germany at a high of 1.5%. Brazil and Russia’s ratio is also around 1%.
Source: SARS 2013/14; Annual report pg. 44-47
Human Capital and Employment Equity
%
Disability rate = 1.99% Women ratio = 62% Women in mgmt ~ 41% PDI in mgmt > 58%
Source: SARS 2013/14; Annual report pg. 63-65
0% 10% 20% 30% 40% 50% 60% African Coloured Indian White 2010/11 2011/12 2012/13 2013/14
Tax type
Printed estimate Feb 2013 Revised estimate Feb 2014 Actual result Increase / decrease on Printed estimate Increase / decrease on Revised estimate R million R million R million R million R million Personal income tax (PIT) 307 109 309 731 310 929 3 820 1 198 Company income tax (CIT) 171 314 178 743 179 520 8 206 777 22 930 17 000 17 309
309 Value-added tax (VAT) 242 990 239 286 237 667
Domestic VAT 272 104 262 804 263 461
657 Import VAT 125 414 129 530 131 085 5 671 1 554 VAT refunds
Fuel levy 44 970 43 300 43 685
385 Customs duties 41 340 44 500 44 179 2 839
Specific excise duties 31 265 28 943 29 039
97 Taxes on property 9 070 10 375 10 487 1 417 112 Skills development levy 12 403 12 300 12 476 73 176 Other taxes and duties 14 613 14 821 14 725 112
Total tax revenue 898 004 899 000 900 015 2 011 1 015 Customs revenue * 167 376 174 346 175 795 8 419 1 450 730 628 724 654 724 220
Total tax revenue 898 004 899 000 900 015 2 011 1 015
Note: * Customs revenue includes Import VAT, Customs duties, Miscellaneous customs and excise and Incandescent light bulb levy.
Secondary tax on companies (STC) / Dividends tax (DT) Tax revenue (excluding customs revenue)
Source: SARS 2013/14; Annual report pg. 16
Tax type
Printed estimate Feb 2013 Revised estimate Feb 2014 Actual result Increase / decrease
estimate Increase / decrease
estimate R million R million R million R million R million Tax revenue 898 004 899 000 900 015 2 011 1 015 Non-tax revenue 23 328 30 541 29 776 6 448
Mineral and Petroleum Resource Royalties 5 900 6 500 6 439 539
Mining leases and ownership
100 100 54 Other non-tax revenue and extraordinary receipts* 17 428 23 995 23 237 5 809
Less: SACU payments 43 374 43 374 43 374
877 958 886 167 886 416 8 459 250
Note: * This figure, received at National Treasury, is preliminary and unaudited.
Source: SARS 2013/14; Annual report pg. 16
Stakeholder Description of collaborative efforts ATAF Host country and SARS currently chairs the forum
Source: SARS Annual report, pg. 45
GFTEI
Exchange of Information for Tax Purposes Co-chair the OECD’s Task Force on Tax and Development OECD
DHA
CIPC Assist with new system and “smart” ad cards and passports Cross referencing records