Trevor Manuel Says Tax Crackdown Will Continue In South Africa

by Robert Lee, Tax-News.com, London

15 April 2002

South African Finance Minister, Trevor Manuel announced on Thursday that although the budget deficit for fiscal 2001/02 has fallen to 1.4% of gross domestic product (compared with 2.3% in 2000/01, and around 10% in the period immediately prior to the end of apartheid), the South African Revenue Service will continue to crack down on tax evasion in order to broaden the tax net.

'Despite good revenue collections, the compliance levels in South Africa are still unacceptably low,' he told reporters. 'There are still too many individuals and businesses who should be registered for tax that are not.'

Revenue Commissioner Pravin Gordhan confirmed that tax collections would continue to improve as a result of stricter enforcement, the hiring of additional staff, and better controls. However, despite suggesting that there are 'still some very significant amounts to be collected', the tax chief admitted that the revenue service is currently trying to improve its methods of estimating uncollected tax.

'In the last 18 months, I have been making reference to a tax gap of more than 30 billion rand. Now we seem to be at a number in excess of that figure,' he explained last week.

Mr Gordhan also revealed that the vast majority of uncollected tax is from the country's formal sector, not the vast informal sector, which encompasses occupations such as street trader and transport operator.

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