Economist says tax evasion findings ‘alarming’
An economist says the taxman's clampdown on tax
evasion has produced some alarming findings.
This week, Treasury and SARS released the 17th annual edition of South Africa's Tax Statistics between 2020 and 2024.
The revenue service collected more than R2 trillion in gross tax revenue in the 2023/24 fiscal year.
That is a 4,2% increase from the previous year.
SARS refunded R413 billion in taxes, a jump of 8,6% from the year before.
Economist Azar Jammine from Econometrix has been commenting on the report.
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"It’s a heck of a lot of money in relation to tackle tax revenue of just under R2 trillion. We are talking about close to 15% of where tax revenue is being collected from sources that are non-compliant," he said.
"To me, that is very high; it is also a bit worrying because it suggests that some of these figures may not be able to be sustained in the future and therefore, in the future, we may end up with less tax revenues than we have now."
Jammine says there's two ways in which people attempt to avoid paying their tax.
"The one is not to declare their income at all, and basically to lie about how much they earn. The second which is probably more prominent, is that there are legal ways in which income can be declared in such a way that it doesn't get taxed as heavily.
"One suspects that the R260 billion is being collected from both sources of avoidance or evasion. I would suspect that the major, especially in the business sector and with welfare individuals, there are several ways in which one can try and develop schemes to reduce one tax liability."
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The taxman says it will make it costly for taxpayers who ignore their obligations.
It secured compliance revenue to the tune of R260 billion for the 2023/24 fiscal year, 25.5% more than in the preceding year.
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