STATE COFFERS
Tax revolt will lead to a legal battle that only SARS can win
There has been discussion recently about a "tax revolt" by South African taxpayers in response to political and economic woes. This seems to be driven by rising frustration at state capture, credit downgrades and anaemic economic growth. About 35% of SA’s gross tax revenue comes from indirect taxes such as value-added tax (VAT). Personal income tax makes up about 40%, while corporate income tax accounts for about 17%. Let’s analyse exactly how a tax revolt might work. An individual or company registered for tax is required to submit a tax return in the manner prescribed by the South African Revenue Service (SARS) so that SARS can raise an assessment for the amount of tax due. If the taxpayer simply does not file the necessary tax return, SARS will raise a tax assessment based on its estimate of the amount owing by the taxpayer. Once this assessment has been raised, it constitutes a tax debt due to SARS. SARS may therefore after providing the taxpayer with 10 business days’ notice, f...
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