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The
revenue service said based on its 2017 data, 48.3% of companies
had taxable income equal to zero, 27.4% reported an assessed
loss, and 24.3% had positive taxable income. Companies have up
to 12 months from the end of their financial cycles to submit
tax returns.
"The decline can largely be attributed to sluggish economic
growth, structural challenges in some sectors of the economy,
low confidence levels and political uncertainty," the revenue
service said.
"All of these factors play a role in subdued investment
activity, resulting in lower profitability for companies."
In the revenue service's 2019 Tax Statistics, which measures
revenue collection from 2014/15 to 2018/19 fiscal years, revenue
collection for the current year ended March reached 1.287
trillion rand ($90.25 billion), short of a target of 1.302
trillion rand.
The collector said companies submitting returns had fallen 36.9%
to just over 2 million for the 2018/19 fiscal year, partly due
to many being considered "inactive or dormant", while only
63.4%, or 572,000, of companies expected to submit returns had
complied.
Tax revenues have fallen sharply in South Africa since 2015 due
to weak economic growth and maladministration.
In addition, nationwide electricity blackouts, forcing mines and
small businesses to shut down, have put more pressure on the
economy and government finances.
In October, the National Treasury said the budget deficit would
jump to 5.9% of gross domestic product by 2020, its highest
since 2009/10, and likely reach a 6.5% deficit in 2021, well
above government's target of 4.5%.
($1 = 14.2606 rand)
(Reporting by Mfuneko Toyana. Editing by Jane Merriman)
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