Budget 2023
Share

Gigaba will have to regain taxpayer trust

Johannesburg – Finance Minister Malusi Gigaba will have to put South Africans, ratings agencies and international markets at ease about the country’s fiscal position when he delivers the mini budget on October 25, said a tax expert.

Ettiene Retief, chairperson of the national tax and SA Revenue Service (SARS) committee as the SA Institute of Professional Accountants, said there was a lack of trust among taxpayers due to fruitless and wasteful government expenditure.

“In order to regain the trust of taxpayers they will have to be convinced that expenditure incurred by government is ‘reasonable’,” he said.

SARS has missed its first quarter revenue target by R13bn.

Tax collections for Personal Income Tax, Corporate Tax and VAT are all expected to be lower than February projections, said Retief.

“The procedures followed by SARS to collect and administer the tax system must be seen to be reasonable. More aggression is likely to lead to more resistance from taxpayers,” he said.

“It is essential that SARS remains efficient and robust in its collection and administration of the tax base."

“However, there are concerns that there is slippage in tax compliance and that taxpayers can expect more aggressive treatment from the taxman,” said Retief.

This echoes what Tax Ombud Judge Bernard Ngoepe said at the launch of his office’s annual report for 2016/17 on Tuesday. Ngoepe stressed the importance of SARS treating taxpayers fairly.

This will motivate people to comply with their duties, he explained.

“We don’t like SARS to adopt a ‘skop and donner’ attitude, we want them to treat people fairly,” said Ngoepe.

He also called for SARS to practice good governance, saying this impacted the morale and confidence people have in the system.

Retief said that reports of corruption and wastage by government would make taxpayers more reluctant to give their “hard earned” money to the revenue service. 

“South Africans will need clarity on how Minister Gigaba is going to adjust his budget,” he said,

“They will also need assurance that government will keep expenditure in check, and even cut costs at non-performing entities,” said Retief.

Old Mutual Investment Group head of economic research Johann Els projects a shortfall in revenue collection for SARS of around R50bn this year, as does Momentum Investments economist Sanisha Packirisamy.

Packirisamy has suggested that Gigaba may have to look to other revenue streams, such as fuel taxes, higher sin taxes, and possibly the removal of medical aid tax credits, to claw back some of the shortfall.

Retief, meanwhile, expects government's Special Voluntary Disclosure Programme to provide a boost to revenue collections. Gigaba is expected to give further details on how well the programme worked at the mini budget.  

Retief noted that the mini budget woulf also provide an indication of how the state intends to tackle fiscal challenges over the next three years. “The question [is] whether the minister will stay on the course set by the previous minister [Pravin] Gordhan, or will he present revised fiscal policy objectives and spending priorities going forward?”

“He must be able to convince international markets that all is under control," added Retief. 

* Visit our Mini Budget Special Issuefor all the news, views and analysis.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.3%
Rand - Pound
24.14
-0.1%
Rand - Euro
20.65
-0.3%
Rand - Aus dollar
12.38
+0.3%
Rand - Yen
0.13
+0.5%
Platinum
905.16
-2.0%
Palladium
1,006.63
+0.1%
Gold
2,157.24
-0.2%
Silver
24.94
-0.4%
Brent Crude
86.89
+1.8%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders