Taxman shifts compliance focus to smaller firms
THE South African Revenue Service (SARS) is planning to pay more attention to ensuring that medium and smaller companies, along with those in the “cash economy”, pay their taxes.
This comes after several years in which the focus has been mainly on tackling noncompliance in the large-business sector.
SARS group executive Randall Carolissen said the revenue service would shift some of its attention to the cash-based economy and medium and small companies because “we have seen considerable churn in that segment in the levels of compliance and the levels of payment, and we have seen some inexplicable behaviour”.
SARS is busy with a range of initiatives to close gaps in the tax system, particularly the Base Erosion and Profit Shifting (BEPS) initiative that tax authorities are pursuing globally.
However, PwC director Kyle Mandy said although there was still a significant “tax gap”, the BEPS was not where the tax gap was — rather it was with small and medium-sized businesses and the cash economy.
Mr Carolissen said SARS was also receiving information from other jurisdictions on South Africans with offshore accounts. He was speaking at the release yesterday of the annual Tax Statistics bulletin compiled by SARS and the Treasury, which shows that although there are 2.7-million registered companies, 650,000 are assessed for tax purposes. Of these, only about a quarter have positive taxable income.
The bulletin also reported that the 308 large companies with taxable incomes of more than R200m accounted for 59% of corporate income tax, reflecting the concentrated nature of SA’s economy.