Sars to crack down on tax avoidance schemes


Johannesburg – South African Revenue Services (Sars) Commissioner Edward Kieswetter is looking to collect “tens of billions” in taxes from people and institutions who are deliberately hiding it from the collection agency.

Kieswetter says Sars has come across a number of schemes seeking to avoid paying tax and is now diligently working to not only unwind them but also to collect what’s due.

Finding more tax revenue has become a matter of urgency for South Africa. The country was in a difficult economic position prior to the beginning of the Covid-19 lockdown in March, but the situation has become even worse – the economic decline has led to projected tax revenues falling R300billion.

The tax authority’s work to close the gap can already be seen in it collecting about R500 million in tax from people who were not paying tax due on the renting of second or third properties.

Kieswetter noted that there has been unusual activity in what he calls “white collar” schemes. Sars has seen instances where there were suspiciously high interest charges on the loans parent companies grant their subsidiaries.

By clamping down on these types of schemes, “there are comfortably tens of billions that can be collected”.

Kieswetter says the government is not blind to the burden taxpayers are under. This is why it is looking at “broadening the base and improving compliance”.

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