SARS rand

Emergency Budget South Africa Leaves Tax Levels Unchanged (Opinion)

 South Africa

Emergency budget South Africa takes aim at government debt. Tito Mboweni, the current Minister of Finance pulled no punches when delivering the Emergency budget yesterday. But, he has determined that the buck stops here. Along with the head of SARS Edward Kieswetter, they vowed to hunt down tax evaders and strictly control Municipal spending.

South Africa’s current debt is staggering

Minister Mboweni bluntly stated in his address, “Debt is our weakness. We have accumulated far too much debt; this downturn will add more. This year, out of every rand that we pay in tax, 21 cents goes to paying the interest on our past debts.” He went on to liken the debt to a hippopotamus eating South Africa’s revenue. He added, “Our Herculean task is to stabilise debt”.

South Africa’s debt aside, the economy struggled prior to COVID-19. In February, the economy was forecast to grow by a mere 3.3%. COVID-19 wrought global damage with the current global reduction touted at 5.2%. South Africa’s drop is estimated to exceed 7%. The worst economic downturn since 1870.

South Africans warned that more borrowing is unavoidable

With more borrowing unavoidable. What can be done? The government seems set on borrowing US$7Billion. The Minister’s quick to confirm that the government’s well aware that it comes with paybacks. Treasury intends tightening the screws on government spending, scrutinising every rand spent. SARS gears up for tax evaders. Mr. Mboweni commended South Africa’s combined efforts at combatting the COVID-19 downturn. He pointed out the ongoing co-operation between business and state in facing the crisis. He went on to state:

“The Solidarity Fund…augmented government’s efforts to procure medical and personal protective equipment. We thank all those who…made much-needed contributions to the fund. These examples show that working together with the private sector with a common purpose we can get stuff done. We will use these lessons to re-energize public‐private partnerships”.

The last sentence in the quote above speaks directly to any ANC members wavering alongside the EFF’s constant calls for Nationalisation. The Minister insisted that South Africa will pull together and avoid the kind of tragic economies seen in Zimbabwe, Greece, and Argentina.

Emergency budget sees SARS actively seeks out tax evaders

South Africa’s head of SARS, Edward Kieswetter formed a unit called The Large Business Unit within SARS. Their purpose –  to investigate companies and super-rich South Africans with special tax arrangements. They are chasing up on non-compliance and investigating syndicated fraudulent activity. International importers who under-declare invoice values and therefore defraud SARS are being targeted, as well as false VAT declarations. This is considered of greater importance in tax collection than raising taxes on the already heavily overburdened Joe Public taxpayer.

Current SAPS presence at Beit Bridge – is it effective?

Undoubtedly a day at Beit Bridge would reveal astonishing under-declaration of imports. Especially if SARS officials examine the fake undercarriages of Zimbabwean trucks moving illegal cigarettes across the border. Actually, that’s a common subject of discussion at braais in Harare. Beit Bridge teams with members of the South African Police.

But if you passed through the border you probably noticed many of them seem glued to their cell phones. What do they do other than take up parking spaces? Please, Mr. Kieswetter, go to Beit Bridge. You may even gain some tax from the thriving illegal cigarette trade and offset some of the disastrous effects of the anti-smoking agenda.

South Africans should admire Mr. Mboweni. With no apparent personal political ambitions, the man serves his country as best as he can. He and Mr. Kieswetter deserve our admiration and support. If anyone can get us through COVID and global recession, these are possibly the two men to do it.

What do you think of our new head of SARS? If you know of any tax wrongdoing would you report it? Remember, every cent of unpaid tax will eventually become the responsibility of Joe Public the taxpayer.

Sound off your thoughts in the comments below.

Remember to check back with SANs Newsfeed often for more news about Africa.


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