Sars' coffers still filling up
Feb 03 2009 09:43
Ruan Jooste
Johannesburg - The South African Revenue Services' (Sars') successes in collecting revenue are expected to continue in spite of a withering economy.
Ernie Lai King, the head of Deneys Reitz Tax, anticipates that the tax revenue to gross domestic product (GDP) percentage for the upcoming financial year will break the 30% barrier, which is far above the 25% recommended by the Katz Commission and a step up from the current 29%.
"With a declining GDP the increased percentage will leave less for saving and saving is a prerequisite for a successful economy," says Lai King. "However, it's an election year and South Africa's socio-economic demands are vast. Alleviation of poverty is a priority plus provisions have to be made for example to improve electricity capacity," says Lai King. "Taxpayers should get their tax affairs in order as Sars can be expected to increase their collection efforts.
"Job losses are also expected through retrenchments which will put further strain on efforts to alleviate poverty."
Lai King adds that government needs to establish programmes for those who lose their jobs to create their own. Tax concessions for small- and medium-sized businesses are not expected to be significantly enhanced and Lai King suggests direct cash subsidies, improving access to credit, and removing bureaucratic red tape.
He adds that government could establish a mentoring programme to ensure the transfer of skills to aspiring business people. He says there are skilled retired business people who could assist
Lai King also hopes that government examines the many qualified audit reports of its departments. "Taxpayers are finding the lack of accountability unacceptable and it will eventually hamper the efforts of Sars in improving tax compliance.
- Fin24.com
Ruan Jooste
