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Authorities set to flex tax muscle

Feb 06 2013 14:07
Cape Town - Tax authorities are under strain and will intensify tax collections from a smaller pool of taxpayers, according to KPMG.

The firm said that the tax man will need to source additional revenue to address increasing fiscal deficits and the implementation of the National Development Plan that is touted to grow the economy.

"The result has been an increase in tax audits and disputes, creating an uncertain landscape for taxpayers," said KPMG corporate tax director Roula Hadjipaschalis.

Authorities will continue to audit large corporate taxpayers regularly but the frequency and intensity of the audit may vary, said Hadjipaschalis.

This means taxpayers will face a challenging tax environment.

"Even where these transactions comply with the letter of the law, they may be regarded as tax aggressive if they do not comply with the 'spirit' of the law", he said.

Furthermore, the firm said that the introduction of the Tax Administration Act provides authorities with invasive powers such as search and seizure of documents without a warrant

"Taxpayers who are subjected to an audit would be well advised to treat these exposures proactively", said KPMG.

However the firm noted that globally tax authorities are becoming more aggressive in pursuing corporates.

The country has experienced tapered economic growth due to the crisis in the eurozone which is South Africa's largest trading partner.  

As a result, it had also been predicated that the projected growth of 2.7% will not be achieved in the current fiscal year.

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kpmg  |  tax administration bill  |  tax

 
 
 

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