Taxing problem at Sars

NON-PAYMENT: LACK OF PUBLIC TRUST RESULTING IN NON-COMPLIANCE

This has a negative impact on the fiscus, says the acting commissioner.

Rogue taxpayers are posing a risk to the country’s fiscus, revenue service boss Mark Kingon is warning. Speaking at the 21st Southern African Internal Audit Conference in Johannesburg yesterday, the South African Revenue Service’s (Sars) acting commissioner expressed various concerns over the role of effective auditing in combating corruption and how a loss of confidence in the profession due to corruption in government institutions meant further loss of revenue to the state.

This was against the backdrop of the latest probe into possible graft at Sars relating to revelations that the controversial Gupta family was illegally paid at least R420 million in tax refunds via an attorney’s trust account.

Kingon said that despite recent efforts to change the institution’s tainted reputation, the revenue service was still suffering the effects of a distrusting and demotivated taxpayer base.

“This year, Sars has one of the most crucial risks, with low levels of public trust and credibility which impact on the fiscus.

“Public trust and behaviour of taxpayers in doing what is right is of a serious concern to us as the revenue service – and specifically regarding people who are simply choosing to not pay their taxes,” he said. Kingon cited that in April and May this year alone, some 35 000 VAT (value added tax) vendors who submitted their returns did not pay the VAT due to Sars, which amounted to about R1.5 billion. “I don’t want to get into the debate about how government spends money, but there are works afoot to ensure government spends credibly. And we recognise that also impacts on people’s willingness to pay.”

Political analyst Steven Friedman, a panellist at the event, said South Africa’s economic woes also stemmed from a lack of macroeconomic planning before and after 1994.

He said that while there were negotiations in 1994 regarding changes to the political environment, these talks failed to address the future of the economy.

The result was that although there had been tremendous changes in the past, “we are still stuck with many of the economic concerns we were stuck with in 1994 because this is still a very difficult economy to get into.

“It is still an economy which excludes millions of people because there are huge barriers.”

These factors, Kingon believed, encouraged wide corruption in South Africa.

People are simply choosing to not pay their taxes