By Monique Vanek
South Africa is losing more than R100bn ($5.6bn) in tax revenue due to people not paying and fiddling their returns. The tax collecting authority estimates nearly half of South African companies aren’t paying tax on behalf of their employees and others are avoiding them. This was the word from South African Revenue Service (Sars) Commissioner Edward Kieswetter on Wednesday as he presented the preliminary revenue collection results for 2019/2020.
He said it may even be more than an R100bn and is working with the Davis Tax Committee to find out if there is more. The committee assesses South Africa’s tax policy framework to support inclusive growth and employment.
“Our initial assessment suggests the number is higher,” Kieswetter surmised.
Kieswetter attributed the loss to three factors:
Sars plans to get tough this year on tax dodgers by using machine learning and artificial intelligence to hunt down fraudulent claims.
The commissioner also revealed that despite a weak economy, Sars as of midnight managed to collect R1.4trn in tax revenue – growth of 5.3% for the 2019/2020 year. Most of the revenue was raised from personal income tax (R528.9bn or 39%), followed by value-added tax (VAT) contributing R346.6bn (25.6%), company income tax: R214.7bn or 15.8% and customs duties at R55.4 billion (4.1%).
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