Improved tax collection and administration continues to be an important element in achieving fiscal consolidation, the National Treasury said on Wednesday. <\/p>\n
It said despite several years of mismanagement, the South African Revenue Service continues to rebuild its capacity.<\/p>\n
The service\u2019s near-term objectives include finalising the tax gap study in December 2020 to quantify the difference between how much tax should be collected and how much is collected; remaining focused on international taxes – particularly aggressive tax planning using transfer pricing; increasing enforcement to eliminate syndicated fraud and tax crimes and continuing to use third-party data to find non-compliant taxpayers.<\/p>\n
In additon, SARS will focus on collecting pay-as-you-earn and VAT debt, and ensuring that outstanding taxpayer returns are filed and liabilities paid.<\/p>\n
Tax revenue to increase to R1.5 trillion<\/strong><\/p>\n The National Treasury said, meanwhile, it expects tax revenue to increase by 25.2 % of GDP over a three-year period.<\/p>\n \u201cTax revenue is expected to increase to R1.5 trillion, or 25.2 % of GDP, by the end of the MTEF period. The extraordinary shock to economic output in 2020\/21 translates into large revenue shortfalls that will persist over the medium term.<\/p>\n \u201cThe shortfalls are exacerbated by a reduction in the tax-to-GDP ratio, because the tax system automatically adjusts to reduce the amount of revenue that is collected for a given level of economic activity in the event of a crisis.\u201d<\/p>\n In April 2020, government introduced tax relief measures to provide temporary assistance to businesses and households during the lockdown.<\/p>\n These interventions offered a combination of cash-flow relief through tax deferrals, and direct support through increased incentives to retain lower-income employees and reductions in payroll taxes.<\/p>\n Details on the take-up and effects of these measures will be provided in the 2021 Budget Review.<\/p>\n