Cosatu urges Sars to target wealthy tax dodgers

If the government is serious about raising revenue in the absence of a VAT hike, it should target wealthy tax-dodging individuals and companies, the Congress of SA Trade Unions (Cosatu) says.

Spokesperson Matthew Parks said the SA Revenue Service (Sars) should receive the resources it needs to boost tax compliance by at least 2% or R40 billion per annum.

“This should include targeting tax evasion by high-wealth individuals and companies, customs fraud, illicit trade in alcohol and tobacco-related products and online gambling,” he said.

Chase rich tax crooks – Cosatu

His thoughts were echoed by Wayne Duvenage, CEO for the Organisation Undoing Tax Abuse (Outa), who said the VAT increase was never necessary.

The government had not demonstrated that it had done enough to collect tax revenues from illicit trading and tax evasion, along with the reduction of waste, inefficiency and unnecessary spending in so many areas of government.

Parks said the government should carry out a “simple, surgical adjustment” of revenue and expenditure which should included by reducing luxury expenditure on travel, catering, accommodation, advertising and consultants; including monies spent on the Cabinet and the executives; and requiring all state institutions to tackle wastage.

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Parks warned that Treasury needs to resist “the unhelpful temptation to slash many important progressive allocations in the budget, including freezing the fuel tax and increasing social grants to above inflation as these provide relief to millions of the most vulnerable and inject additional stimulus into the economy”.

He said Cosatu was confident the money reduction caused by holding VAT at the same level could be made up “in ways that protect the poor, capacitate the state and stimulate growth.

“Once the budget’s adoption has been concluded, it will be critical that parliament’s finance committees hold monthly engagements with Sars to ensure it is on track to improve collection substantially.”

SA needs to focus on international trading investment

Prof Peter Baur, an economist from the University of Johannesburg, said: “To mitigate the impact of the tax scrapping, SA needs to focus more on international trading investment.

“Our international trading has been negatively affected by President Donald Trump’s administration’s tariff hikes and other trade orientated penalties.

“And the world economy is not doing well which will slow down our exports.

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“We need to look at other countries that we can trade with internationally to mitigate the impact of the US sanction.”