South Africa’s tax take could well be lower than forecast this year, with a downturn in the economy exacerbating problems at the tax revenue service, the country’s Finance Minister said last Monday.
Nhlanhla Nene told a tax conference in Johannesburg that tax avoidance and evasion would rise in any economy that was growing slowly and where taxes had been increased, and the recession would only worsen matters.
The country entered recession in the second quarter for the first time since 2009.
According to the minister, there is now additional downside risk to the tax revenue projected at the beginning of the year because of the contraction in the economy.
“Fixing our economy to ensure that it grows faster and in a more sustainable manner is therefore critical,” said Nene.
He also cited problems experienced by the South African Revenue Service (SARS) as obstacles to achieving the target.
President Cyril Ramaphosa suspended SARS Commissioner Tom Moyane in March over alleged misconduct during the previous administration of Jacob Zuma, establishing an inquiry into the allegations two months later.
Moyane has denied wrongdoing.