The R40 billion refund pool: Why SARS wants to pay your business out first

South African Revenue Service (SARS) Commissioner Johnstone Makhubu says that the revenue service would rather pay out tax refunds

South African Revenue Service (SARS) Commissioner Johnstone Makhubu says that the revenue service would rather pay out tax refunds during filing season, even if it means paying out more money than it collects.

Makhubu said that filing season is a period where SARS becomes a net payer because large numbers of taxpayers submit claims for refunds at the same time, adding that during the last tax season, the revenue service paid out around R40 billion.

"The filing season is really a net cashout flow, we rarely collect much revenue during this season. We would rather pay out a lot. We indicated that from July through to January last year, we paid around R40 billion during this time," he said.

He added that the R40 billion paid out to taxpayers has a wider economic impact because it flows back into households and businesses.