Sars expects to lose one-third of collection

JOHANNESBURG – The South African Revenue Service (Sars) has said it expected to record a loss of more than a third of its total tax collections this year as the coronavirus has all but decimated the country’s revenue streams.

Sars said it would collect nearly R300billion less tax this year than its February forecast. This due to the disruption the pandemic has caused to economic activity and the nationwide lockdown that entered its 40th day yesterday.

Sars Commissioner Edward Kieswetter said yesterday that tax and customs revenue collection was significantly affected during this period. He said revenue collection would also be impacted by the cost of Covid-19 tax relief measures estimated at R70bn as part of the government’s stimulus package.

“While it is early days, our initial view is that revenue performance will be lower than the February Budget announcement by between 15 and 20percent,” Kieswetter said. “This means that revenue under-recovery could move up to R285bn.”

Last month, Sars reported a revenue shortfall of more than R66bn for the financial year to the end of March as company income tax dwindled on weak economic growth.