South Africa is among the 37 countries in which the African Tax Administration Forum has reported significant tax revenue growth after conducting a survey.
The forum’s report has noted that the countries that participated in the African Tax Outlook collected total tax revenue of $ 555 Billion in 2021 compared to $ 267 Billion in 2020.
Research analyst at South African Revenue Service (SARS), Winile Ngobeni says VAT remains the most effective tax collection mechanism among most of the surveyed countries.
Ngobeni says, “For us in the developing countries or the less developed counties, we tend to rely more on VAT, and again VAT is mainly easier to administer and it doesn’t have a lot of complications. When we look at CIT contributions, it has the largest share of revenue in countries like Nigeria Niger and Mozambique, whereas personal income tax in countries like Eswatini, South Africa, Lesotho, and Botswana where their revenue shares account for more than 30% of total revenue.”
Data-driven insights
SARS Commissioner Edward Kieswetter says data-driven insights are helping to increase value-added tax revenue collection in the country. He says it helped to deliver R41 billion in tax revenue last year.
Kieswetter told delegates at the launch of the 2022 Africa Tax Outlook Report in Johannesburg that data science-supported tax administration has assisted SARS in securing 54 successful criminal prosecutions.
“I can tell you that R3.9 million of the R4.3 million tax returns we don’t even touch. It is processed and assessed through our automated tax processor using the data that is at our hand and machinery algorithms, only 10%, one out of every 10 VAT returns are then selected and not selected because a human being has applied their mind, it is selected because the risk detection capability we have build will select it for further verification.”
