File Photo: IOL
File Photo: IOL

Make citizens’ tax returns public to avoid Sars recapture – AIDC

By Kabelo Khumalo Time of article published May 28, 2019

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JOHANNESBURG – Civil society organisation the Alternative Information and Development Centre (AIDC) said on Monday that all South African citizens’ tax returns should be made publicly available to avoid the recapture of the revenue service.

AIDC said in its submission to the Zondo Commission of Inquiry into State Capture that the current tax secrecy paradigm prevented authorities, business interests and civil society organisations from playing their role in safeguarding tax collection mechanisms.

It said its research had shown that the state capture within the SA Revenue Service (Sars) may have had consequences beyond diminishing tax collection figures.

The submission, titled “The Tax Consequences of State Capture and Reform Proposals” was authored by Dominic Brown, head of the AIDC’s Economic Justice Programme, and Erwan Malary,  a former advocacy officer in the programme.

AIDC said the allegations around the capture of Sars exposed the major flaws in tax administration.

“The submission proposes the establishment, in steps, of national records accessible both online and in municipal buildings where all South African citizens' tax returns will be available,” AIDC said.

“In addition to this, the creation of a public registry of beneficial ownership for all types of companies, land and assets in South Africa. The publication of country-by-country, subsidiary-by-subsidiary reports all large companies operating in South Africa in an easily accessible database.”

A threshold set by the Organisation for Economic Co-operation and Development international tax forum has imposed country-by-country, subsidiary-by-subsidiary reporting to all companies with a turnover of more than €750 million (R12.08 billion).

AIDC said it preferred this to be reduced to between R1bn and R2bn of annual turnover worldwide.

AIDC’s data showed that the net loss for South African public finances for the 5-year period 2014 to 2018 due to underperformance in tax collections came to R158bn in real terms, which means an average of R32bn a year.

The non-governmental organisation said that there was a need for the creation of a public registry of beneficial ownership for all types of companies, land and assets in South Africa. 

The Nugent Commission of Inquiry into Tax Administration and Governance by Sars called for sweeping changes into how the Sars commissioner is appointed and how the agency is run. In what will be a groundbreaking move, Nugent also “strongly” advocated for the creation of an inspector-general role to look into the affairs of Sars, while the establishment of an oversight board has also been recommended.

Nugent had found that the capture of Sars began immediately after Tom Moyane’s appointment as head of the revenue service in 2014. President Cyril Ramaphosa swiftly dismissed Moyane following Nugent’s findings.

AIDC said Nugent’s recommendation were inadequate to prevent the re-capture of the revenue services.

“The implementation of these additional oversight bodies will, of course, mean that it will take a longer time for a political faction to place people in these many positions, but it doesn’t make it impossible,” it said.


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