'Sars to have contracting revenue base for foreseeable future'
Sars commissioner Edward Kieswetter says tax collection is correlated to the economy and when the minister set the Sars original estimate for the year, the working assumption was that the economy would expand by 5 %.
However, he says the economy is likely to contract by more than 7%, therefore there will definitely be a decline in revenue performance for 2020.
The commissioner joins Bongani Bingwa to chat about the impact of the COVID-19 hard lockdown to tax revenue collection and its new auto assessment system.
During the hard lockdown, it wasn't only about stopping economic activity that the lockdown brought about, it is also the fact that some of those businesses may never come back and that is a loss of economic capacity.Edward Kieswetter, Commissioner - Sars
And some of the jobs that have been lost will not come back immediately. Our longer term concern notwithstanding this year's revenue decline, is that for the foreseeable future, we have a contracting revenue base.Edward Kieswetter, Commissioner - Sars
He says as of the end of June, Sars was trailing by R73 billion on year on year.
Kieswetter adds that Sars has started its modernisation process and it will apply a lot more focus on the compliance of the employers.
Luckily there are employers that have complied, we then take the information from banks, medical institutions and retirement fund institutions and use machinery and our auto assessment algorithms to produce an assessment outcome for you.Edward Kieswetter, Commissioner - Sars
Listen below to the full conversation:
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