South Africa Puts Tax Compliance As Priority
by Lorys Charalambous, Tax-News.com, Cyprus
28 May 2013
In their parliamentary speeches regarding the vote on South Africa's 2013 Budget, both Finance Minister Pravin Gordhan and Deputy Finance Minister Nhlanhla Nene stressed the priority the National Treasury is giving to an improvement of tax administration and compliance.
Gordhan looked to a modernization of the tax administration leading to necessary base broadening and a reduction of compliance costs as the automated tax clearance certificate system rolls out, while Nene focused on closing domestic and international tax loopholes.
Gordhan pointed out that a new tax administration system has been established since 1994 in the South African Revenue Service (SARS), and that "the overhaul and modernization of the tax structure and administration has allowed tax rates to be lowered alongside broadening of the tax base."
He specifically mentioned, for example, that modernizing and automating the corporate income tax system for companies is well advanced, with the automated tax clearance certificate system and the new income tax return for companies, which will both reduce compliance costs through simplification, being operational this year.
On the other hand, Nene concentrated on the "crucial role" that SARS has in collecting the funds required for South Africa's development needs. For the 2013-14 fiscal year, SARS is now required to collect ZAR898bn (USD94bn) of tax revenue, which is nearly 10 percent or ZAR84bn more than was collected in the previous year, which had itself been 9.6 percent higher than actual collections in 2011-12.
He complained, however that meeting that target would not be easy, particularly "because of corporates and wealthy individuals who organize their affairs in such a way that they do not pay their fair share of tax. They achieve this through sophisticated tax avoidance and evasion schemes."
He confirmed that SARS should extend its global agreements on the exchange of tax information to more jurisdictions, and use its powers in the new Tax Administration Act "to detect and deter non-compliance, including stiff penalties for those who are willfully non-compliant."
SARS is, for example, to focus on increasing the use of mobile technology to allow taxpayers easy and convenient access to services wherever they are; reviewing its branch footprint to better reach taxpayers and traders; developing a single registration process for businesses and traders to reduce the costs of tax and customs compliance; and bringing all economic activity within its purview even when there is no revenue to be derived. That would include having sight of all informal businesses.
To see today's news, click here.
Tax-News Reviews

A review and forecast of Cyprus's international business, legal and investment climate.

A review and forecast of Malta's international business, legal and investment climate.

A review and forecast of Jersey's international business, legal and investment climate.

A review of the latest budget news and government financial statements from around the world.
Stay Updated
Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.
By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.
To manage your mailing list preferences, please click here »
Network Blogs and Features
- stockpiling paper »
- Hong Kong Business and Work Culture: All you need to know »
- prospects looking rosy »
- The Diamond Industry in UAE »
- Brexit Ramifications For Ireland »
- Easy guide to starting a home-based business in Ohio »
- unintended consequences »
- Basic Guide to Set up a Home Based Business in Hong Kong »
- Life's never simple »
- Licensing options for payment service provider in UAE »