Billions more in tax takings likely to be lost to Sars

JOHANNESBURG – The South African Revenue Service (Sars) is set to lose billions more tax in revenue, while the government up-scales to provide additional liquidity to keep businesses operational, as the coronavirus pandemic continues to wreak havoc across the country’s economic sectors.

The National Treasury yesterday published a second set of measures aimed to assist individuals and businesses in distress with tax reliefs of up to R70billion, allowing for a wage subsidy of R500 to R750 per month for employees who earn less than R6500 per month. The measures, part of President Cyril Ramaphosa’s R500bn stimulus package and economic-relief measures announced on Tuesday, are set to cost Sars R26bn in lost revenue.

The Treasury said Sars was working to upgrade its systems for the relief measures that would include the deference of the first carbon-tax payment to provide businesses with a R20bn cash flow, a 35 percent pay as you earn (PAYE) liability for business with a gross income of less than R100 million, and a portion of their provisional corporate income-tax payments.

It said the measures would provide businesses with an incentive to retain lower-income employees.

“Assisting businesses now will ensure that our economy is in a better position to recover once the health crisis starts to subside,” the Treasury said. “The measures are expected to provide about R70bn in support, either through reductions in taxes otherwise payable or through deferrals of tax payments for tax-compliant businesses.”