The collection of tax revenue is one of the most informed indicators of how successful a country is in stimulating growth, development and investment in its economy; in encouraging its citizens to comply with its laws; and in maintaining an appropriate balance between its fiscal expenditure needs and available income streams.

The ability of a government to intervene during times of economic crises, market contagion or recessions, depends on the strength and depth of its fiscal position – the tax revenues it has, it can or it is expected to generate through revenue collection.

The 2012 February Budget set SARS a revenue target of R738.7 billion:

• Against this target, SARS collected R742.7 billion which is R4 billion (0.5%) more than the Revised revenue Estimate in the 2012 Budget.
• The tax-to-GDP-ratio remained relatively unchanged year-on-year, from 24.5% in 2010/11 to 24.8% in 2011/12 and well below the pre-crisis high of 27.6% in 2007/08.
• Government’s preliminary spending outcome of R968.5 billion is R4 billion lower than anticipated in the 2012 Budget.
• The new budget deficit figure is 4.5% of GDP. The deficit figure is lower than the 2012 Budget Estimate of 4.8% of GDP. The preliminary revenue performance has firmed up the forecast 2012 Budget projections and therefore removes the requirement for additional borrowing.

Document prepared by the South African Revenue Service