SARS Commissioner Edward Kieswetter explains to media that improved administrative processes represent a better strategy than raising taxes to overcome South Africa's fiscal concerns.
SARS Commissioner Edward Kieswetter explains to media that improved administrative processes represent a better strategy than raising taxes to overcome South Africa’s fiscal concerns. Image credit: SABC News.
(The Post News)- South African Revenue Service (SARS) Commissioner Edward Kieswetter advises South Africa against tax hike policies as a problem-solving measure for national financial difficulties. He advocates for enhancing SARS administration capabilities since better administrative functions would produce better revenue collection results.
Daily Investor reports that the government predicts a R56.8 billion shortage in its current tax revenue predictions. Finance Minister Enoch Godongwana put forward three options to resolve the deficit including boosting borrowing capacity and making budget cuts together with considering tax rate enhancements. Tax hikes trigger concern from Kieswetter about damaging both tax compliance and economic development potential.
Based on his assessment SARS has the potential to obtain R15 billion by enhancing operational methods instead of implementing higher tax rates. Kieswetter told Daily Investor that past tax hikes produced unforeseen effects that included tax evasion as well as fraudulent activities. Kieswetter pointed out that the VAT tax hike to support free education coincided with notably worse tax fraud together with manipulation activities. Kieswetter explained that high government spending requires attention rather than hiking taxes.
Kieswetter highlighted to The Citizen that SARS needed substantial financial support for enhancing its digital systems. SARS seeks to enhance its technological capacity by adapting its systems for modern business models and tax-related criminal activities after long years of state capture and funding limitations. Digitalization serves as a vital instrument for developing tax compliance while making fraud detection more efficient according to him.
The collection of taxes remains a concern to Kieswetter due to the activities of criminal cartels. The tax-related crimes in South Africa annually result in financial losses of between R200 billion and R300 billion as reported by IOL. Kieswetter emphasized that dealing with such situations needs both well-funded SARS operations and an efficient structure to deter tax evasion along with illicit financial behavior. Nursing and upgrading SARS’ administrative function together with technological strength represents a stable approach to financial management instead of implementing higher taxation rates according to Kieswetter. The government should build revenue through SARS modernization alongside stronger tax enforcement to retain trust from taxpayers.
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