Dividend windfall salvages SARS target
An unexpected R5.4bn dividend tax windfall prompts concerns SARS was not vigilant enough with backdated dividend declarations
An unexpected R5.4bn dividend tax windfall enabled the South African Revenue Service (SARS) to hit its target for the latest tax year, despite shortfalls in other taxes — raising questions about what might come to SARS’s rescue as it works to meet even tougher targets in the coming year. The dividend windfall, which was thanks mainly to the increase in the dividend tax rate from 15% to 20% announced by former finance minister Pravin Gordhan in his February budget, has also prompted concerns that some companies may have backdated dividend declarations to take advantage of the lower tax rate — and that SARS may not have been vigilant enough as it raced to meet its targets ahead of the end of the tax year on March 31. SARS reported last Monday it had marginally exceeded February’s budget target, which had been revised down by R30bn compared to last February, with SARS commissioner Tom Moyane calling the revenue result "an outstanding achievement". However, a detailed look at the number...
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