Johannesburg - After collecting a record R1.0699 trillion in taxes in 2015, the SA Revenue Service (Sars) wanted to widen the net, paying special attention to the so-called cash economy, Sars Commissioner Tom Moyane said on Friday.
“Sars has appointed a group of 23 young economists to look into the issue of the tax gap because we need to address non-compliance and deal with the cash economy and the township economy. That is where we lose money because people are not paying tax,” Moyane said.
Read: Sars begins clampdown on tax dodgers
He said South Africa could learn from what other countries had done. “For instance, Mozambique has a unit that deals with the cash economy. I visited Mozambique and saw that informal traders there pay tax. Why? Because you inculcate the culture that paying tax is cool. The trader who is sitting there selling his or her wares knows that, if I pay, the money will build a school, a clinic and contribute to the welfare of their country.
“We can learn from our colleagues. The thing is we have not thought outside the box. These things can be done. For example, most transactions that take place on cash do not appear in our system,” he said.
Worrisome
He said the proliferation of informal traders in townships and small rural towns who bought stock in cash was worrisome. “If you draw a line a little bit, the money might be funding terrorist activities somewhere else. That is money that is being shipped somewhere,” he said.
Moyane said Sars wanted to make it difficult for tax dodgers to cheat the system.
In 2015, personal tax collections totalled R389.3 billion, which is 10 percent (R35.3bn) higher than 2014. At 280.8bn, VAT was 7.4 percent higher compared with 2014. Customs and Excise duties were R151.8bn, up from R136.7bn in 2014, while corporate income tax collection was R193.5bn, up from R186.6bn in 2014.
Finance Minister Pravin Gordhan on Friday praised Sars for the improved tax collection in tough economic times. “We have built one of the most effective tax authorities in the developing world that has made huge strides over the past decade in enforcing the law. Our focus must also be to maintain that,” Gordhan said.
Moyane has praised Sars’ new operating model for the increase in collections. Without the new model, Sars could have missed the revised estimate of R1.069.7trln by almost R12bn, Moyane said.
The new model entailed re-aligning the organisation, he said. “For instance, (in the past) customer and excise was a stepchild. Now it is a branch on its own. We have elevated it. Like anywhere in the world, customs is the frontline in the defence against illicit economy. If you do not give it prominence and space to operate, you are treating it with a band aid. You need a team that deals with customs and excise.
“Secondly, you need to have business and individual taxes to deal with all tax types. So that when a taxpayer walks into Sars, he or she gets all the services. You are not told ‘no, this office cannot deal with your matter, go to Braamfontein’.
“Thirdly, you need a unit that deals with human resources. You must be able to have succession planning, retention of staff, training and identifying potential leaders. That is what this operating model is about. We can unpack it in a number of ways. But at the centre of it all is how best can we collect money,” he said.
BUSINESS REPORT