Tuesday, January 18

Taxpayer compliance campaign yields R172bn for the fiscus


Concerted efforts by the South African Revenue Service (Sars) to collect outstanding debt and boost taxpayer compliance on all types of taxes have yielded R172 billion for the fiscus, the tax authority confirmed this week.

However, Sars Commissioner Edward Kieswetter admits that levels of tax compliance remain under pressure, dropping from 65% to around 62.6%. The impact and prevalence of corruption and waste are not helping to improve fiscal morality in our society, he warned.

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Read: Better-than-expected tax collections bode well for South Africa

Tax morality is generally influenced by the effectiveness of government and the provision of services in exchange for contributions from individual and corporate taxpayers.

Sars said in a statement, ahead of Finance Minister Enoch Godongwana’s first medium-term budget policy statement (MTBPS) on Thursday, that it raised R38 billion more than the revised revenue estimate of R1.2 trillion.

Economic indicators favored better-than-expected growth, however the inability of power generator Eskom to keep the lights on has cooled spirits ahead of the mini budget.

Read:
I’m not quitting, says Eskom’s boss.
For the first time, there is a real concern about network stability.

The aftermath of the Covid-19 restrictions and the destructive July riots in KwaZulu-Natal and parts of Gauteng are still being felt in the economy, despite some relief measures, such as payment deferrals totaling less than 40 billion. of rand.

Collections

The taxpayer compliance campaign secured debt collection from large companies (R12 billion), high-wealth individuals (R42 billion) and “corporate actions” (R6.8 billion).

Sars’ Voluntary Disclosure Program generated additional revenue of R4.6 billion, pending returns (R5.4 billion), and targeted criminal investigations and preservation orders of less than R2 billion.

According to Kieswetter, there is still room to improve compliance on all types of taxes.

Compliance levels for tax products, such as employee taxes (PAYE) and business taxes (CIT), remain a concern.

“Sars has embarked on focused programs to address this trend,” Kieswetter said.

Read: Sars misbehaves: The tax service exercised ‘unreasonable discretion’ in rejecting the sanction

It has also recovered around R 147 million from personal protective equipment fraud. The tax authority has had a good success rate in terms of prosecutions thanks to the collaboration with the National Prosecutor’s Office.

Although Sars paid reimbursements to the tune of R300 billion, it prevented “reimbursement leakage” of nearly R46 billion. It also saved fiscus R4.3 billion by reducing refunds.

Tax base

Sars has previously commented on the 26,000 unregistered taxpayers who have financial assets valued at more than R 1 million and should certainly contribute to the tax network.

In a statement, Kieswetter said the tax base has expanded with 1.6 million taxpayers. This resulted in additional tax revenue of R 4.6 billion during the year under review.

Read: 5.8% of the population pays about 92% of all personal taxes

Sars did not elaborate on where these taxpayers come from or whether they include deviant politicians or bidding entrepreneurs.

The broadening of the tax base includes all taxpayer segments, such as startups, the revenue collector said when asked who the additional taxpayers are.

However, Sars said his information does not have a taxpayer category in terms of ‘deviant politicians’ and, presumably, not for bidding entrepreneurs either.

Kieswetter said Sars will invest 3% of its budgeted resources in its modernization program to keep up with a “rapidly changing technology space.”


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