Hon House Chairperson, as the Minister has already outlined the key elements and objectives of the Bills before us, both the Taxation Laws Amendment Bill and the Tax Administration Laws Amendment Bill, the most important elements that I want to reflect on are that they seek not only to align the tax treatment of individuals, but also to ensure that we encourage a culture of savings through retirement savings, so that we can contribute to the sustainability of our fiscus and economic growth.
What is also important is to protect the tax base from base erosion, particularly in the corporate sector through profit shifting sharing schemes. There is the research and development tax incentive for encouraging innovation and creativity, and there is also seeing to it that the e-commerce industry in South Africa is protected by ensuring that foreign companies operating in the e-commerce space are subject to VAT. Mineral and petroleum royalties are also critical for our own economic base.
The other most important element that I need to highlight is the evolution of our tax system since 1994. The obligation to pay tax to a democratic state is part of our social compact that enables the state to function, protects its citizens and invests in their future. At the birth of democracy in the United States of America, the slogan was, "No taxation without representation." This underlines the connection between obligations of the citizenry and their rights within the state. This holds true for South Africans too, as evidenced by the Bambatha rebellion and the Pondo revolts.
The formation of the SA Revenue Service and its administrative reforms were envisaged in the Reconstruction and Development Programme, which stated that "improved and reformed tax systems will collect more tax without having to raise tax levels". I think that for the years that the ANC government has been in power and for the years that it will remain in power, we have achieved, and will continue to achieve, our objectives.
Sars has evolved into an organisation respected and admired across the world. Sars has been at the centre of a series of tax administration and organisational reforms that have completely changed the relationship between the state and taxpayers. A key element of the social contract between government and its citizens is that of paying one's fair share of taxes.
Revenue collection is about supporting economic growth, in our case to support job creation and to reduce poverty and inequalities. Therefore, tax enforcement is about service delivery. Equally, it is important that those of us who are in charge of the fiscus should instil confidence in taxpayers by making sure that they have confidence that their money is being put to good use.
Prior to April 1994 South Africa had 11 separate Inland Revenue and Customs and Excise institutions scattered across so-called independent states and self-governing territories, in keeping with the apartheid dispensation. These were amalgamated by the South African Revenue Service Act of 1997 into a single institution.
I am raising this matter to remind our colleagues that when we delay passing some of these Acts, we are in other words inadvertently trying to stall economic transformation and the impact of democracy on millions of citizens that have not really seen change in some areas of South Africa.
Let me just mention some figures. Since 1994 Sars has collected R7,3 trillion. For the year 1994 the total collection stood at R114 billion, and grew to R814 billion in the past fiscal year. This rise in revenue has been accomplished despite reducing the top marginal tax rate for businesses and individuals from 40% to 28% and 43% to 40% respectively. Over the same period there were significant adjustments to the tax brackets, which returned money to the pockets of taxpayers.
By 2007 South Africa could boast of a surplus budget, in contrast to a 10% deficit in 1994. This was during the tenure of hon Trevor Manuel as the Minister of Finance and the current Minister of Finance as the commissioner of Sars. This indicates to us that in the ANC you find embedded leadership with a vision that continues to implement the policies of the ANC in order to steer this country forward. I think all of us should appreciate the work that the ANC is doing for this country. The consistent accomplishments of Sars have granted the government the fiscal space to carry out its programmes without resorting to significant international borrowing. Education spending has increased in manifold ways, and government has extended social assistance to over 15 million people. All this is supported by the provisions of the revenue Bills that we continue to amend and improve every financial year.
Over the years the democratic government has introduced a number of changes to make tax laws more progressive, by introducing reforms of wealth taxes such as the residence-based tax, capital gains tax, dividend tax, and so on. This was accomplished without reducing capital flight from the South African economy.
The modernisation programme and its systems have served as a template for the automation of government systems, as we witnessed during the 2010 Fifa World Cup, and the intervention and collaboration between Sars and the Department of Home Affairs. There is great potential in the collaboration between the Department of Home Affairs, Sars and the Companies and Intellectual Property Commission in laying a firm foundation for identifying the management of both individuals and business entities, which will benefit all of government's programmes.
Two important developments have led Sars and the Department of Home Affairs to collaborate on a much broader scale. The first was the co-operation between Sars and the Department of Home Affairs to develop and implement the electronic passenger movement control system during the time of the 2010 Fifa World Cup.
The second is the overall modernisation of the Department of Home Affairs system, which is building a state-of-the-art integrated information technology platform for a more effective identity management system for the whole of government. This will be a more secure, cost-effective and efficient system, which will use biometric information. A key part of the project is the live capture system for the smart identity document cards, and passports.
It is important to mention this achievement by Sars so that, as we debate these Bills before us, we understand the impact some of these institutions continue to make, not only in developing or supporting the economy, but in changing the quality of our people's lives.
Today our people can have access to IDs within a very reasonable, short space of time. That makes it possible for them to access social grants and it also makes it possible for them to be able to register for any other service that the government can offer.
Credible tax statistics improve policy formulation and form assessments, and therefore also promote a culture of transparency regarding fiscal affairs, as generally advocated by the provisions of the Bill of Rights and the Promotion of Access to Information Act. Our tax statistics once again confirm the responsiveness of the South African tax administration system.
We may recall that even during the most difficult period of the world economy and domestic issues, all taxes rebounded strongly from the slump in collection observed during the recession, with the exception of corporate income tax, which remains depressed due to there being many companies still carrying assessed losses incurred, from which they have not fully recovered to the levels preceding the recession.
For the 2012-13 fiscal year revenue collected amounted to R813,8 billion, and grew by R71,2 billion, or 9,6%, over the previous year. The tax to GDP ratio increased marginally, from 25% in 2011-12 to 25,3% in 2012-13. Even under these difficult conditions the current Medium-Term Budget Policy Statement indicates that the revenue under collection from the revised revenue collection figures is only R3 billion.
I take this opportunity to submit the report and also to say that the committee supports the Bill. Therefore, the ANC supports the passing of this Bill. I thank you. [Applause.]