More than 2 000 entities in South Africa owe Sars R170-billion, while 440 individuals owe the tax man R22-billion.
This was revealed earlier this week by Finance Minister Enoch Godongwana who was responding to a question-and-answer session in Parliament.
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He said Sars is pursuing several strategies to ensure taxpayers understand their tax obligations, and that the law is enforced where these are not met.
Of the R22-billion owed to Sars by over 400 individuals, just 72 owe 68% of this amount, while about 500 entities owe 76% of the debt in that category.
Broken down, 242 individuals owe between R10 and R20-million, 126 owe between R20 and R50-million, while 72 owe more than R50-million.
Reported amounts include capital debt, interest, penalties, and additional tax, according to the minister.
Tax debt can arise from a number of scenarios, including submission of returns without payment, and audit assessments.
‘Depending on the origination of the debt, such debt can accumulate due to interest, penalties and additional taxes,’ said Godongwana.
‘Furthermore, debt could be as a result of a single assessment resulting in large amounts of debt being added into the debt book,’ he said.
While Sars follows a prescribed debt collection process on overdue taxes, not all instances of enforcement, including deferral of payment arrangements and third party appointments lead to the timely collection of debt.
Over the next three years, Sars wants to implement a revenue recovery programme aimed at raising overall revenue by between 5 and 10% from ‘compliance’ activities.
These include curbing exemptions, developing a tax and revenue system based on voluntary compliance, adopting tax broadening strategies, increasing audit capacity, and encouraging citizens to regulate tax affairs.
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