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South African Revenue Service Revels In Record Taxes

by Lisa Ugur, Tax-news.com, London

18 April 2001


The South African Revenue Service (SARS) pulled in record revenues last year and has put its perfomance down to its overall stragegy of increasing compliance levels in collecting taxes. Preliminary results show that SARS collected a massive R219.732 billion for the financial year 2000/2001, exceeding the printed revenue target of R212.2 billion by R7.5 billion as well as the revised estimate of R215.5 billion by an additional R4.2 billion in revenue for the year ended March 31 2001.

In a statement, the tax organisation pointed to a number of reasons for the increase in revenue, amongst them the implementation of effective debt collection and enforcement strategies, improved investigative capacity to improve compliance, and the clearing up of considerable backlogs in assessments and auditing of tax returns. More broadly, the organisation says it is committed to raising levels of tax and customs compliance in both the corporate sector and individual taxpayers in the belief that higher levels of compliance play a crucial role in the growth of South Africa's economy.

The bulk of the surplus on the revised estimate, totalling R4.2 billion, came via income tax. SARS’ compliance strategy, said the organisation, "delivered much higher than anticipated receipts from companies due to increased company profits as well as improved audit and assessment processes." VAT receipts also saw an increase. Secondary Tax on Companies (STC) registered about R1.988 billion higher than the printed estimate, mainly due to considerably higher corporate earning distributions from a number of big corporations.

SARS said that it owed much of its success to its new call centre project, which is all about enforcement. As part of its strategy to render an effective tax system, SARS recently unveiled a collections call centre in Randburg, north of Johannesburg, the thrust of which is remind tax payers of due dates for the payment of various taxes and tax returns and to inform taxpayers of outstanding taxes.

As for new financial year, SARS said it will see "nationally co-ordinated, integrated campaigns focusing on high-risk industries and activities. Such campaigns will include audits, investigations and customs control. Key players in these sectors will be approached by SARS to fashion out a united approach to raising the levels of compliance and levelling the playing fields for all participants."

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