Compliance will help Sars reach revenue target, says Edward Kieswetter
The tax agency has a revenue target of R1.422-trillion for 2019/2010, but revenue collection has fallen short of budget targets in recent years
It is not the economy but the quality of tax compliance that will help Sars achieve its 2019/2020 revenue target, commissioner Edward Kieswetter said.
Sars has set itself an ambitious revenue target of R1.422-trillion for 2019/2020, which the new commissioner says it is striving to achieve.
“My confidence is not in the economy; I accept that it is what it is, it is not in thinking up new proposals, and therefore 100% effort at the moment is to ensure we understand the risks that should direct our work, and that we direct our work appropriately to give us the best possible chance to collect the revenue due,” Kieswetter said.
The revenue target is set taking three things into account: macro-economic conditions; additional tax proposals; and compliance activities.
Revenue collection has fallen short of budget targets over the past five fiscal years.
The tax agency collected R1.287-trillion for 2018/2019, which was R14.6bn, or 1.1%, short of the revised estimate of R1.302-trillion announced in the February 2019 budget. However, it still represented growth of R71.2bn, or 5.8%, from the R1.216-trillion collected in 2017/2018.
Kieswetter took up the job of Sars commissioner on May 1 after President Cyril Ramaphosa announced his appointment in March. He took over from Mark Kingon, a Sars veteran who took over in an acting capacity after Ramaphosa suspended Tom Moyane in 2018.
Moyane was fired in November, in line with recommendations from judge Robert Nugent, who headed a commission of inquiry into governance failures at the institution. The failures were blamed for revenue shortfalls that led to a VAT increase in 2018, the first in more than two decades, which hurt the country’s poorest.
Kieswetter, who has been in the job for just more than a month, announced on Tuesday that the 2019/2020 tax season would officially open on August 1, while taxpayers who are registered for eFiling or have access to Sars’s mobile app, could file their income tax returns from July 1.
“We would like to reiterate our commitment to building confidence between the SA public and the SA Revenue Service,” Kieswetter said at a briefing in Pretoria. “It is very important for us, and [we are] working hard to earn the trust of the SA public. We will continue the work of ensuring tax morality and compliance.”
Kieswetter said voluntary compliance is the highest leverage to reduce the tax burden on everyone. He also announced that Sars had raised the tax threshold for returns to R500,000. The previous threshold covered those earning less than R350,000 a year, meaning they did not have to file returns.
During the last tax season 1.5-million taxpayers were not required to file submitted returns.
The closing date for the tax season will be October 31 for those filing at Sars branches. For taxpayers who use eFiling, the deadline is December 4 and for provisional taxpayers who file online the closing date is January 31 2020.
Kieswetter said tax is simply an overlay of economic activity and if Sars is better connected to the economy it could serve it better.
He gave a warning to those who are not tax compliant and said there will be consequences. “We go out of our way to assist honest taxpayers but dishonest taxpayers will experience consequences for their action.”