Edward Kieswetter, Commissioner of the SA Revenue Service
- SARS Commissioner Edward Kieswetter says the time is not right to increase the burden on taxpayers.
- No new taxes are needed now that compliance measures are paying off.
- Households should receive incentives to install their own power generation.
- For more financial news, go to News24 Business Cover.
SA Revenue Service (SARS) Commissioner Edward Kieswetter says tax compliance measures are working so well that he and the National Treasury agree there is no need to impose new taxes now.
Kieswetter spoke at the PSG Think Big series on Tuesday.
In two weeks, Finance Minister Enoch Godongwana will present the national budget, the only time changes in fiscal policy can be made. Fiscal policy is the sole prerogative of the finance minister and is not determined by SARS.
However, Kieswetter said there was general agreement with the Treasury that the direction of taxes, particularly for companies, should follow international trends and be downward. There was also plenty of room to further increase tax compliance, which is still relatively low, and a new tax, such as a wealth tax, was neither necessary nor advisable.
Kieswetter said:
We have plenty of fruit in our grasp to improve revenue collection, which of course has been boosted by the occasional improvement in the mining or financial sector. But those things will even out over time. The real benefit for us is the significant growth that we’ve seen in what we call the fulfillment dividend, meaning the additional revenue that we’ve been able to raise, despite the economic circumstances.
The compliance measures involved closer scrutiny of a sample of 8% of tax returns, of which only a quarter qualified for closer scrutiny, prevented the outflow of R42bn in impermissible refunds last year. , said.
While the idea of a wealth tax has been disputed, “we are of the opinion that the compliance dividend reduces the pressure or need for any other taxes… Our collective mindset at this time is more to seek to improve our administrative competence and not increase the burden on people,” he said.
Kieswetter said he would also like to see tax incentives or concessions for households to invest in their own power generation or even a zero rating on products that offer alternative energy solutions.
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“The last change to the policy regarding renewable energy was made in 2016 when companies were allowed to accelerate the depreciation of renewable energy by one year, which effectively means a 28% discount on their investment.
“When that was introduced, we would not have known or been aware of how far the energy crisis would have receded and what other instruments we would need to respond to it.
“And from what I believe and have already been engaged by colleagues at Treasury to say, we should look at additional measures to provide some relief and incentive for people to make an investment in themselves and become a little more self-sufficient.”
