REVENUE
CLAIRE BISSEKER: More resentful taxpayers will not pay up
SARS ignores evidence of a simmering revolt at its peril
Former finance minister Pravin Gordhan provoked a furious backlash from South African Revenue Service (SARS) commissioner Tom Moyane earlier in 2017, when he blamed the deterioration in tax administration for being a factor behind the decline in tax collection. Gordhan was battling to understand why SA’s resilient tax buoyancy — one of the few positive trends underlying the country’s public finances — had finally lost its bounce. SA’s tax buoyancy ratio (the responsiveness of tax collections to economic growth) almost halved overnight from 1.46 to 0.88 during 2016-2017. It was the first time since the global financial crisis that tax revenue growth had not exceeded economic growth. This fanned growing unease as to whether SA’s steady tax morality and tax administration could continue being taken for granted. Still, the Treasury assumed it was an aberration and budgeted for the ratio to recover and average 1.22 for the next three years. Unfortunately, the ratio has since slipped furt...
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