South Africa: Crunch the Numbers - the Tax Base Is Not Dwindling

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The number of taxpayers who contribute to the tax base is also increasing and commentary that states otherwise seems to emanate from a misunderstanding of the concept of assessed taxpayers.

On 30 October 2019, Minister of Finance Tito Mboweni will deliver the medium-term budget policy statement (MTBPS), reporting on the progress made in achieving the revenue and expenditure targets set in the February 2019 Budget. Many commentators predict that a shortfall of between R50-billion and R60-billion on the revenue target of R1.42-trillion will be revealed - a shortfall of between 3.5% and 4.2%, compared to last year's 1.1%.

Revenue shortfalls have been the subject of several articles in the media and are frequently discussed with reference to the poor administration of the South African Revenue Service (SARS), as detailed in the findings of the Nugent Commission in 2018.

The recent resignation of Athol Williams - partner at Bain & Company - reminds us that we still do not know to what extent the tentacles of corruption penetrated SARS, depleting the agency's capacity and compromising important operational units. Indeed, in an interview with Business Maverick on 17 October 2019, Williams stated that, "Bain is withholding information about the restructuring of SARS...

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