An unexpected R5.4bn dividend tax windfall enabled SARS to hit its target for the latest tax year, despite shortfalls in other taxes – which a Business Day report says raises questions about what might come to SARS’ rescue as it works to meet even tougher targets in the coming year.

The dividend windfall, which was thanks mainly to the increase in the dividend tax rate from 15% to 20%, has also prompted concerns that some companies may have backdated dividend declarations to take advantage of the lower tax rate – and that SARS may not have been vigilant enough as it raced to meet its targets ahead of the end of the tax year on 31 March.

A detailed look at the numbers shows that collections in almost all the tax categories were below even the revised February estimates, and that without the sharp 30% jump in dividend tax collections, SARS would have come in billions of rand behind target. The increase in the dividend tax took effect on budget day, on dividends declared but not yet paid out, so in theory, companies should not have been able to declare extra dividends or bring payouts forward to take advantage of the lower rate.

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