These refunds were subject to audit and review and amounted to 0.89 percent of the value of all VAT transactions in the 2010 financial year, he said in written reply to a parliamentary question.
These refunds were overdue because of refund verification procedures which were taking longer than 21 working days to finalise.
VAT refunds had been a target for fraudulent activity, Gordhan said.
Therefore, any process change to expedite refunds should take this risk into account and balance the desire for service and efficiency with the responsibility the SA Revenue Service (SARS) had to ensure that refunds were not erroneously paid.
"SARS is however continually engaged in a process to improve the audit of VAT vendors to ensure that these refunds are processed as timeously as possible," he said.
VAT was also on the SARS modernisation agenda for future enhancements to the entire VAT process.
The key reason for delays related to difficulties in obtaining the correct data from taxpayers timeously to enable SARS to determine the accuracy and validity of the VAT refund claims, he said.