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Tax boss is disappointed with taxi and business associations

By unknown | May 30, 2007 | COMMENTS [ 0 ]

Waghied Misbach

Waghied Misbach

On the face of it, Sars commissioner Pravin Gordhan is an unassuming and affable man, but he is also known to be tough and uncompromising when it comes to getting taxpayers to pay their dues.

This carrot-and-stick approach is very much in evidence when Gordhan speaks about tomorrow's deadline for the amnesty to allow small businesses to put their affairs in order. The amnesty is aimed at businesses with a turnover of R10million or less. It applies to income tax, secondary tax on companies, tax on royalties, employee tax, unemployment insurance fund contributions and the skills development levy.

The last amnesty was the Foreign Exchange Control Amnesty, which saw 42672 people apply for amnesty for assets worth R68,6billion in February 2003 and realised R2,9billion for state coffers.

Small business amnesty applications were coming in thick and fast in the final days this week. Gordhan said they increased to 3000 a day from 200 a day last year when the amnesty window opened. More than 60000 applications had been received, including more than 7000 from taxi operators.

"That's normal human behaviour. As you get closer to the deadline, larger numbers come in. My colleagues have been doing excellent work, putting thousands of Sars officers in the field and gently reminding people - sometimes not so gently - about their responsibilities and opportunities," said Gordhan.

He said what was really needed was a change of attitude towards tax collection.

"There is no doubt what we are asking for is what you might call a cultural shift in South Africa, because, if you have been making say R2000 a day or R10000 a week or R50000 a month, then you become used to the idea of keeping most of it, apart from your expenses. In that sense, it is acknowledged that tax is an expense and there is a reluctance to part with that money."

Gordhan said citizens must pay their fair share.

"It is a story we have been saying for 10 years now. But it is still an unfinished story because as our economy grows, ever more people are on the one hand moving from one section of the economy to another. A lot more people are becoming active economically in a different kind of way - self-employed and generating income.

"We have a huge amount of educational work to do and that's a responsibility we'd like to share with the media and other public institutions so we can begin to influence mindsets. Some people do want to become part of the [tax] net, but others need to be persuaded and educated to come into the net."

Sars communications general manager Logan Wort said the amnesty was an opportunity to come clean.

"If we do catch you after this and you have been in business for 25 years, you are going to owe us tax for all 25 years.

"So this is one huge opportunity to wipe your slate clean in a big way, especially for those businesses operating for so long without registering for tax. It is a very generous amnesty," said Wort.

Gordhan said there had been obstacles and disappointments so far because small business is not an organised sector and bodies representing small business were ineffective in getting their "constituency" to pay tax.

"We find it better to speak directly to people on the ground, where they are coming to the party more enthusiastically.

"We are disappointed with the response of taxi associations and some small business organisations. I am not going to name them."

Wort said big business also had a part to play. "Part of the problem is that big corporates, who use small businesses in their supply chain, haven't realised their interests lie in ensuring their suppliers are tax compliant.

"When Sars fines these suppliers, it affects the risk exposure of banks that lent money to them and it ripples through the supply chain of companies who buy from them."


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