Consumption, 2-pot up revenue

Sars able to reduce October estimated R22bn shortfall on pension access tax.

- Amanda Visser

Tax collections came in just below the October forecasts for the 2024-25 tax year. The South African Revenue Service (Sars) was able to collect R1.84 trillion, which is R19.3 billion less than forecast in last year's main budget in February. Sars was able to reduce the October estimated shortfall of R22 billion on the back of a larger-than-expected tax collection from the two-pot retirement withdrawals and growth in consumption due to lower interest rates because of lower inflation.

Sars Commissioner Edward Kieswetter said during a media briefing in Cape Town with National Treasury, ahead of the planned budget speech (which was later called off), that the "tax take" on the withdrawal from retirement funds overshot the original estimate of R5 billion - by R6 billion.

The withdrawals released an additional R43 billion into the economy. Consumer spending also increased because of the lower interest rates flowing from lower inflation.

Lower fuel levy collections Kieswetter added that the two factors driving revenue collections down were the fuel levy, which was not increased during the February budget last year, and wrong assumptions of growth in imports. "The only thing that can affect the total amount of levy that we collect is consumption. However, consumption is down almost 11%," said Kieswetter.