CAPE TOWN – As the year’s income tax submission deadline draws closer, there is growing concern that the South African Revenue Service (Sars) may fail to meet its tax collection targets for the year.
According to the recent Tax Indaba, about 40 percent of outstanding taxes may not be recovered. This amounts to R143 billion – a whopping increase from the R85 billion outstanding in 2015.
With South Africa officially in a technical recession, the likelihood of Sars collecting this outstanding debt is slim.
Why is tax collection important?
The taxes collected by Sars fund the building of critical infrastructure and social spaces such as our roads, schools, parks and libraries. Taxes contribute to the development of society and the growth and stability of our economy. If there’s a shortfall, the government has to cut back its expenditure on socio-economic development or borrow money, increasing the national debt.