SARS records tax losses higher than both Covid-19 loans combined

SARS records tax losses higher than both Covid-19 loans combined

- South Africa's tax losses for the first few months of the financial year have amounted to more than the IMF and ADB loans combined

- SARS Commissioner Edward Kieswetter explained that the entity had recorded huge losses due to the Covid-19 pandemic

- Kieswetter highlighted the need to raise over R40 billion more in tax revenue in the near future

PAY ATTENTION: Click “See First” under the “Following” tab to see News on your News Feed!

SARS Commissioner Edward Kieswetter has painted a grim picture of SA's tax collected for the first few months of its fiscal year.

SA has lost more tax revenue in the first three and a half months of this period that the loans from the International Monetary Fund and the African Development Bank combined.

With the Covid-19 lockdown seeing most economic activity coming to a halt tax relief has contributed to this situation.

The ban on tobacco and alcohol imposed by the government has also greatly affected the amount of tax paid over to SARS.

SARS records tax losses higher than both Covid-19 loans combined
The revenue service recorded immense losses due to the Covid-19 lockdown. Image: GCIS
Source: UGC

READ ALSO: Report: Magashule's sons score nearly R3 million in Covid-19 tenders

In this time frame, SARS saw an under-recovery of around R47 billion with a 42% contraction on excise-duty collections on alcohol, cigarettes and fuel.

News24 reports that Kieswetter had highlighted a need to ramp up collection, commenting that:

"The reality is that there was a need in February to raise R40 billion more. Right now, that need is significantly bigger than R40 billion because of the coronavirus."

Earlier, reported that the International Monetary Fund approved a R70.7 billion loan to South Africa in a bid to address the socio-economic impact of Covid-19.

This will be South Africa's first-ever loan from the fund and is expected to be paid in the next few days.

The Economic Freedom Fighters have reacted to this news with fierce condemnation:

"The EFF rejects the decision by the IMF Executive Board to approve South Africa's request for a loan of R70.7 billion. This is the biggest political blunder in the history of South Africa."

The party is adamant that the fund will come with unpleasant strings attached, continuing to say that:

"Loans from the IMF always come with neoliberal and neo-colonial conditionalities and South Africa will not escape from this reality. Whether immediately or in the long run, the IMF will impose conditionalities with will certainly undermine South Africa's macroeconomic and fiscal policy sovereignty."

Enjoyed reading our story? Download BRIEFLY's news app on Google Play now and stay up-to-date with major South African news!


Online view pixel