Tax base could grow 9% in next year, says Sars
April 2, 2009
By Ethel Hazelhurst
The tax base has been growing at about 8 percent a year and could add 9 percent in the year ahead, according to Pravin Gordhan, the commissioner of Sars.
The agency had success collecting previously unpaid taxes, which resulted in revenue overruns in most of the past 11 years since it was established.
Last April, Sars reported revenue of R571.8 billion in the 2007/08 tax year - R15.2 billion more than the original budget estimate. The year before, it reported collections of about R37 billion more than the original estimate of R456.7 billion.
Ernest Mazansky, the tax director at Werksmans Attorneys, said yesterday there was better tax compliance due to "improved enforcement as well as improved governance generally". The higher tax take in recent years had been helped by offshore exchange control and the tax amnesty in 2003.
But Mazansky had reservations about the push to meet collection targets each March. "There is a price to be paid, in that they make Sars targets that much harder to meet in the subsequent year. Using perfectly legitimate means, they get taxpayers to pay in March funds that in the past would have been paid in September … so the next fiscal year's cash flow is coming in now," he said.
A tax practitioner, who did not want to be named, pointed out there was a danger that Sars could get less tax in absolute terms than it would otherwise have done because, to secure early payment, it might agree to a settlement that favoured the taxpayer.
Billy Joubert, the head of transfer pricing at Deloitte, said: "We have a much more efficient and motivated Sars now than the organisation that we had 10 years ago."
Sars was set up in 1998, following the introduction of the Sars Act the previous year, which merged the departments of inland revenue and customs and excise into an autonomous unit. It proved far more effective than the previous tax administration, which had been embedded in the civil service, offering uncompetitive salaries.
Sars was able to attract the skills needed to match those of potential tax evaders and avoiders in the private sector.
Sars has continuously upgraded its core data technology systems, updating the service so officials can manage increased administration volumes.
The use of modern technology, including e-filing, has made it easier for taxpayers to pay speedily. - Ethel Hazelhurst
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