Weak economy hits the taxman

Tax revenue in the first quarter of the current financial year was R13.1-billion lower than predicted, confirming the severity of the economy's stagnation.

Personal income tax came in at R104.4-billion (target R110-billion), corporate income tax at R54-billion (R57-billion), dividend tax at R7.2-billion (R9.5-billion), VAT collection R63-billion (R64.7-billion) and customs duties R8.9-billion (R9.7-billion).

Lower personal income tax was mainly due to reduced PAYE tax revenue (a R4.7-billion shortfall) and personal income tax assessment payments (R500-million).

The shortfall in corporate income tax was due to provisional tax payments (R2.4-billion below target), and assessment payments that were R400-million lower than expected.

Customs revenues were lower mainly because of shrinking contributions by the clothing and footwear, and cereals, sectors.

VAT on imports was lower by R1.6-billion. mainly due to declining contributions by machinery, original equipment components and photographic instruments.

VAT refunds were lower than had been estimated by R700-million as real gross fixed capital formation recorded a slower growth of 1% quarter-on-quarter in the first quarter, from the 1.7% quarter-on-quarter growth in the fourth quarter of 2016.

The temporary shutdowns by vehicle manufacturers for plant upgrading shrank exports.

Specific excise duties were R900-million lower, mainly due to lower collections on cigarettes and cigarette tobacco of R1.2-billion.

Smaller companies stopped operating in the previous year to move out of South Africa.

Taxes on properties were higher by R300-million (R7.9%).

- BusinessLIVE