I have been a Tax Practitioner for over 10 Years and this mindset of Government to raise taxes and fuel prices etc are not a solution at all, if everybody were to pay their fair share of taxes there would be more than enough money in the coffers to run the country, Sars needs to focus on the non compliance of many South Africans not paying taxes and less focus on the poor taxpayer who is always compliant, by raising taxes it is these individuals that are suffering even more and untimitaley will lead to them having no more money left to pay.
“But when we are falling short on revenues the answer can’t be ‘tax the people more’. It can’t be ‘well we’ll increase the tax rate; we’ll put personal income taxes up to 45% and we’ll tax the people more’,”
Over the last two years, there have been growing concerns about a slippage in tax compliance amid anger about wastage and corruption.
“We are simply, as an economy, feeling overtaxed. We are taxed out.”
National Treasury increased the Vat rate by one percentage point in April as a last-resort effort to stabilise the country’s deteriorating fiscal position. The top marginal personal income tax rate was increased to 45% in 2017.
There have been ongoing warnings that South Africa needs to increase its small tax base. While lower corporate income tax rates have been introduced in some other countries – making South Africa less attractive by international standards – the country’s weak fiscal position has made it difficult to follow suit.
“The UK are doing all sorts of things [related to] lowering their tax rates. What is South Africa doing?
While small and medium enterprises are important, it is the big corporates that bring big jobs, high-paying jobs, and with that, tax revenues. Sadly, South Africa has lost value as a country and there is also uncertainty around policy.
Corporates aren’t going to move to a country purely for tax reasons, the entire package a country has to offer needs to be attractive. Tax legislation has to support the direction the country wants to go in.
“If we want to create jobs, if we want to bring our unemployment down, and [if] we want to grow our economy, we need policies that support that, which are enabled by tax legislation. I don’t think tax legislation is going to do that on its own.”