The South African Revenue Service (SARS) says initiatives to encourage taxpayers to declare their offshore wealth has yielded fruit in the 2017/2018 financial year.
“The short-term Special Voluntary Disclosure Program (SVDP), initiated to offer taxpayers the opportunity to declare off shore wealth, raised R2.9 billion in taxes in the financial year from 827 processed SVDP applications from the 2024 applications received,” said Finance Minister Nhlanhle Nene.
The Minister was speaking at a media briefing on the preliminary outcomes of revenue collection for the 2017/2018 financial year. The taxman managed to collect R1216.6 billion in the previous financial year.
The R1216.6 billion is R0.7 billion shy of the target set by the former Minister of Finance Malusi Gigaba in the February 2018 Budget speech.
In addition to the SVDP, the ongoing Voluntary Disclosure Program (VDP) continues to perform well and has realised R10.8 billion since 2012 when the VDP was launched.
SARS collected more than R0.8 billion from the national Prominent Business Individuals project. This initiative was developed to ensure an end-to-end view of a taxpayer’s business profile and hence tax liability.
Invoking paragraph 19(3) of the Fourth Schedule of the Income Tax Act, SARS may request additional payments from provisional taxpayers based on the latest estimates of financial performance. This year SARS collected R10.7 billion from Paragraph 19(3) interventions.
Tax compliance drops
Despite a growth of R72.4 billion (6.3%) in revenue collection compared to the 2016/17 financial year, SARS said tax compliance has dropped.
“For any tax authority, tax compliance is one of the key determinants of its revenue performance. SARS has seen a deterioration in compliance as indicated by the overall growth in outstanding returns across all taxes,” said Minister Nene.
Of particular concern is the increase in tax evasion by businesses.
“More concerning though is the increasing tendency of business to withhold taxes such as Value Added Tax and Pay As You Earn collected on behalf of SARS,” said Minister Nene.
To combat this, SARS stepped up its outreach and enforcement programs. Call centres and offices made over one million outbound calls to taxpayers.
“Our outstanding returns campaign will be boosted this year to bring this matter under control. SARS is collaborating with the Department of Justice to expedite the prosecution of tax offences,” said Minister Nene.
Despite this decline in compliance, the Minister said most taxpayers continue to perform their tax obligations diligently. He thanked all taxpayers and SARS officials for their dedication to the growth of the country.
“Today SARS wants to say a huge thank you to all South Africans for this massive contribution to our future growth and development.
“We also want to acknowledge the dedication and professionalism of our 13 500 staff members who have weathered severe reputational challenges to SARS, keeping the administration on course,” said Minister Nene. –SAnews.gov.za
