The South African Revenue Services (Sars) has missed its tax collection target, with Finance Minister Nhlanhla Nene raising concerns about tax compliance in the country.
The revenue service collected R1.216 trillion rand in the 2017/2018 financial year, that's R0.7bn or 0.06% lower than the R1.217 trillion target set by National Treasury.
Speaking to Bongani Bingwa, Keith Engel of the South African Institute of Tax Professionals says SARS has been forced to revise its target.
The 1% increase in VAT will cover it, they understood where they are at, they mostly on target based on where they were on the budget.— Keith Engel, CEO, The African Institute of Tax Professionals
Engel maintains the reason for tax non-compliance was a growing tendency of companies to withhold VAT and PAYE.
A lot of times the employer gives you your salary and is supposed to take your tax and hand it over to Sars, so when businesses are in trouble instead of handing it over that money to Sars they keep it to themselves and they will do the same with VAT.— Keith Engel, CEO, The African Institute of Tax Professionals
Click below for the full interview: