South Africa Improves Tax Compliance

May 25, 2012 Taxation in South Africa

Spring = Tax HeadachePRETORIA – Over the last five years the South African Revenue Service has significantly improved tax compliance in the country, and the number of individuals registered to pay taxes has been nearly doubled.

On May 24th the commissioner of the South African Revenues Service (SARS) Oupa Magashula addressed a parliamentary standing committee on finance, detailing the progress that the Service has made in improving tax compliance in South Africa.

Oupa Magashula said that since the start of the 2007 fiscal year the number of taxpayers registered with the SARS has risen by 5.1 million to approximately 10.3 million, and the increase has been attributed to the Service’s ongoing projects to improve tax compliance in South Africa. He added that the number of business entities registered as taxpayers has also grown from 1.6 million to 2.1 million in the same period.

SARS’s efforts to modernize the tax filing system and introduce electronic filing has also made a significant improvement to tax compliance in the country, with 80.7 percent of individuals now submitting their tax returns on time, compared to only 58 percent in 2008. Late filing of tax returns by companies has also been reduced to 28 percent from nearly 55 percent in 2007.

The commissioner also said that the SARS will soon initiate a collaborative project with other government departments to “clean up the [company] register” and remove companies which are “…listed as active but in reality are either dormant or non-existent”.

Photo by Canadian Pacific