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‘SARS will struggle to meet targets even after country’s economic recovery’

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The South African Revenue Service (SARS) says it will take a miracle to restore its economic capacity and has warned that revenue collection will continue its downward trajectory because of the COVID-19 pandemic.

Commissioner Edward Kieswetter says that revenue performance will be lower than the February budget announcements, by between 15 and 20%.

This means there will be a revenue collection shortfall of R250 billion in 2020. Kieswetter says even if economic activity in the country is restored, SARS will continue to struggle to meet its revenue targets.

“Economic activity can restore once we open up the economy to allow certain activities to continue. The big thing is once you lose economic capacity, that loss is going to be harder to replace because that is the business that will not come back. Those are the jobs that will not come back. Whilst understandably, we’re trying to contain the spread of the virus, an unintended consequence of that is that we are losing economic capacity,” said Kieswetter.

Three phases

Meanwhile, SARS has divided this year’s tax filing into three phases.

The first phase has already started and will end on the 31st of May 2020, this will be for employers and third party institutions such as banks and insurance companies.

The second phase will start in June and end on August 31, 2020 and will be an auto assessment for tax payers to make sure their records are up to date. Individuals who do not have to be assessed can file early.

The last phase will be from September to January 31, 2021 for employee filing.

SARS expects significantly less tax revenue in 2020:

 

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