ECONOMIC WEEK AHEAD: Shortened season for filing returns opens
The tax-filing season opens on Monday ahead of the release of two critical measures of business confidence and vehicle sales.
Acting commissioner for the South African Revenue Service (SARS) Mark Kingon will launch the filing season with Finance Minister Nhlanhla Nene.
The season has been shortened, from July 1 to October 31, and opens against a backdrop of an inquiry into administration and governance lapses. SARS also said on Friday it would remove certain forms and drop boxes for tax returns from branches to push more tax payers to file online.
SARS has been battling slack tax compliance while some VAT vendors have not paid over collections to SARS, which aims to collect R1.345-trillion for the 2018-19 year.
Erika de Villiers, head of tax policy at the South African Institute of Tax Professionals, forecast continued tax compliance challenges.
"Because of economic conditions, a lot of people may consider not paying over their tax," she said.
"The bigger problem is that once tax morality has deteriorated, to turn that around is not quick and easy."
Monday will also see the release of the Absa purchasing managers index (PMI) for June, after the index slipped in May. Meaningful recovery is not expected, although FNB said a weaker rand in June might have spurred export manufacturers to book new orders.
FNB chief economist Mamello Matikinca said this would have pushed the index over the 50 neutral mark. "That said, the broad emerging market sell-off that sparked the currency weakness could see sentiment fall further," she said.
The Standard Bank PMI, which surveys the economy, will be released on Wednesday.
Investec economist Lara Hodes said a recovery in confidence was needed to drive fixed investment and private sector credit demand, which slid further in May.
Vehicle sales for June will be published on Monday and data on gold and foreign exchange reserves and assets and liabilities for June on Friday.
Vehicle sales in May grew 2.4% from a year earlier, thanks to strong growth in commercial vehicles, which offset a paltry 0.7% increase in car sales.