Moyane ambitious on tax target

THE South African Revenue Service (SARS) is confident it will collect more than R1.265-trillion this tax season, but tax experts and the Treasury have cautioned that it is still early days and this might be an ambitious target given the economic climate.

Commissioner Tom Moyane, who was speaking at the launch of tax season on Monday in Orlando, Soweto, said: “We have scanned the horizon and seen that companies are already shedding jobs... But we are confident of reaching our target.”

During the February budget, the Treasury added a tax bracket of 45% for high-income earners, which is expected

However, the increase in unemployment, coupled with the recession, may limit revenue collection.

Moyane said more than 50 000 people had filed their tax returns in the 48 hours since the season opened.

Finance Minister Malusi Gigaba, who was also in Orlando, said: “SA prides itself in the numbers of its people who contribute to revenue collection.”

Head of tax and financial sector policy at the Treasury, Ismail Momoniat, said: “It is realistic, but it’s too early to tell.”

In the Budget Review in February, the Treasury said tax revenue collection had underperformed and was to add R4-billion to revenue. dependent on strong growth and effective tax administration, he said.

Chief director of strategy and risk management at the Treasury, Mampho Modise, said last week that a recession meant the basis for tax revenue would be lower than previously estimated.

“If you have low growth, it means you’re going to struggle with your tax revenue collections,” she said.

PwC head of national tax technical Kyle Mandy said the revenue target was ambitious.

“The messages seem to be pretty mixed, but revenue is under pressure because of the weak economy and low growth.”

The mood among taxpayers was subdued and there could be reduced tax compliance, he cautioned.

Deputy Finance Minister Sfiso Buthelezi seemed to contradict this, saying: “South Africans are seeing the benefits of paying their tax.”

SARS and the Treasury had to put interventions in place, such as education and the enforcement of tax laws, to ensure compliance.

Managing partner for Deloitte Taxation Services in Africa Nazrien Kader said that while SARS collected the majority of its taxes from personal income tax, this was not enough for its 2017 target.

“It’s surprising given that companies are closing and struggling and unemployment is rising. They obviously know something we don’t,” she said. — BDLive