2021/22 tax revenue collection outlook positive, says SARS Commissioner

Despite the crippling effects the COVID-19 pandemic continues to have on the country’s economy, South African Revenue Services (SARS) Commissioner Edward Kieswetter says the tax revenue outlook was positive.

This was revealed during the launch of the 2021 Tax Season on Thursday.

SARS collection activities, which are integrally linked to the state of the economy, were severely hampered by the weight of the restrictions.

“It will be felt,” he said. “The economy has already begun to show encouraging signs of recovery after the impact of the pandemic, but we have a long way to go before we return to pre-COVID levels.

“The fiscal year 2021/22 began on a very positive footing, showing encouraging signs, albeit from a low base. The positive start to the financial year 2021/22 is reflective of a continued economic performance in the period of January to March 2021.”

“We remain committed to safeguard the public’s confidence in our tax administration system during these unprecedented times. Collectively we will ensure that the tax administration system of our Republic continuously made accessible to allow taxpayers to fulfil the obligations and to ensure that the tax revenues due are collected.

He said the SARS effort on improving the overall ecosystem towards compliance and a tremendous focus on revenue recovery is also starting to yield promising fruit. This was reflect in revenue for quarter one of its financial year to continue on the positive trend which was reported at the end of the last fiscal year.

“We are particularly encouraged by the shift in voluntary compliance from large businesses on the international segment and we will continue to work with and through our various stakeholders and intermediaries that represent those businesses in the SMME segment so that we can also improve voluntary compliance,” he said.

Turning attention to the impact of high employment rates, Kieswetter said the 32.6% rate in this regard was of great concern. This, combined with company closures, was anticipated to have an “immeasurable impact” on the country tax base.

“While the impact of the third wave of COVID-19 on the economy is not yet fully understood and presents a downside risk, we will continue to observe and modify our outlook.

“However, for now the tax revenue outlook for 2021-2022 remains positive.

The revenue collector vowed he would spare no effort to collect the tax and customs revenue that is due to the government and estimates set by Finance Minister Tito Mboweni in February.

Virtually filing returns

South African taxpayers will for the first time year have to virtually file their returns, Kieswetter announced.

“Branches will be closed for at least the next six weeks for in person visits. This is in large part to the fact that we are smack bang in the middle of our third wave and we obviously want to minimize the risk to taxpayers and our own staff.

“We are therefore launching today and historically for the first time a completely virtual tax filing season. Allow me to share with you how this has been made possible as I share with you important details of this coming tax season.”

Last year, SARS paid out R29.4 billion in returns to 2.38 million individual taxpayers.

“This year will be no different.”

Source: South African Government News Agency