Edward Kieswetter kisses R60 billion goodbye

Despite posting a new record gross tax revenue amount, SARS commissioner Edward Kieswetter said an estimated R60 billion in potential tax revenue was lost due to load-shedding.

Kieswetter announced that SARS had collected a net revenue amount of R1.687 trillion for the financial year ended on 31 March 2023 – an increase of R123 billion, or 7.86%, from the previous year.

SARS exceeded R2 trillion in gross revenue for the first time. It collected a record gross amount of R2067.8 billion, which excluded R381.1 billion in refunds.

The 2023 gross amount represents an increase of 9.7% from the 2022 collection of R1884.9 billion. Refunds increased by 18.7% from the 2022 amount of R321.1 billion. 

Speaking on The Money Show, Kieswetter said it is “particularly noteworthy that top-line revenue grew at almost 10% in an economy that is expanding in the region of about 5.8% and troubled with load-shedding and other socio-economic and social phenomena”.

According to Kieswetter, this figure could have been higher if not for the erosion of sales and profits due to load-shedding.

Citing data from the CSIR, Kieswetter said that 3,773 hours of production were lost in the 2022 calendar year due to load-shedding. 

There is a loss of tax revenue because of load-shedding, as many businesses do not trade through load-shedding, which means there is a loss of revenue from VAT. Load-shedding also eats into profitability, which reduces income tax from profits.

The tax revenue loss from load-shedding is estimated at R60 billion.

“We are refining our understanding of the full impact and the timing as some of these losses may only manifest over a period.”

In a statement on their Twitter page, SARS said, “Load-shedding is having a debilitating effect on the economy of our country and revenue collection”. 

“The constant electricity disruption impacts the overall profitability and constrains normal lives and business growth.”