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COVID-19 bites into SA’s tax revenue
At a time when the South African government plans to pour billions into reviving the economy the tax people say it will have less to play with in future. SARS Commissioner Edward Kieswetter told the press this afternoon that tax collection was likely to have lost at least R285 billion so far through the COVID-19 lock-down and was likely to lose between 15 and 20 per cent of the annual tax take. He joins CNBC Africa for more.
Tue, 05 May 2020 15:24:01 GMT
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AI Generated Summary
- South Africa faces a potential 20% decline in annual tax revenue, amounting to R285 billion, due to the economic impact of the COVID-19 lockdown.
- Businesses are struggling to meet tax obligations, leading to an increase in deferred payment requests and non-compliance, posing challenges for tax collection efforts.
- SARS is leveraging technology and data analytics to enhance revenue collection efficiency, modernize tax administration systems, and combat tax evasion amid the crisis.
The South African Revenue Service (SARS) is grappling with a substantial loss in tax revenue as a result of the COVID-19 pandemic. Commissioner Edward Kieswetter revealed that the country stands to lose at least R285 billion, representing a potential 20% decrease in the annual tax intake. This drastic decline is primarily attributed to the economic repercussions of the lockdown, which has significantly impacted various revenue streams. The government's initial projections estimated a loss ranging from 5 to 15%, but current assessments indicate a more severe impact. As the crisis unfolds, SARS is facing challenges in tax collection and enforcement, prompting the agency to adopt innovative measures to mitigate the revenue shortfall. Amidst the economic uncertainty, businesses are struggling to meet their tax obligations, leading to an increase in deferred payment requests and non-compliance. In response, SARS is urging taxpayers to fulfill their filing requirements and engage with the agency to explore payment arrangements. Looking towards the future, SARS is focusing on leveraging technology to enhance revenue collection efficiency and tackle tax evasion. The agency's strategic vision includes modernizing its systems and harnessing data analytics to improve compliance monitoring. The COVID-19 crisis has accelerated SARS's digital transformation efforts, with the implementation of new online services and data-driven approaches to streamline tax processes. By embracing technological advancements, SARS aims to build a more resilient and agile tax administration system to navigate the challenges posed by the ongoing pandemic and beyond.
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