Gordhan turns screws on tax avoidance in SA

EVERYONE in formal employment will be required to register with Sars from September as part of a crackdown on tax avoidance, Finance Minister Pravin Gordhan said yesterday.

An official later said the new rule could double the number of people on the Sars register.

In his budget speech to Parliament, Gordhan said the latest indication was that economic growth would be "somewhat higher" this year than the 2,3percent of GDP that he forecast in his budget in February.

The next official update of the growth and inflation outlook is due in October.

Gordhan cautioned that the global economic environment remained volatile and that there was a high risk of a second slowdown following the debt crisis in Europe.

"We will no doubt feel some of the effects of the uncertainty in financial markets and the possible downturn in trade over the period ahead," he said.

Gordhan promised to maintain the counter cyclical fiscal strategy that had bolstered South Africa at the height of the global crisis, but said the government would work hard to develop a new growth path to sustain job creation and fight poverty.

He said many South Africans continued to dodge paying their fair share of the cost of running the country, and he promised new measures to tighten the screws.

"From September this year, Sars will require all those receiving any form of employment income - including those below the tax threshold - to be registered with Sars to help reduce the scope for non-compliance," he told Parliament.

About 5,6million people pay personal tax at present out of about 13,5million people who are employed.

Sars general manager Mark Kingon told Sowetan the provision would not initially apply to domestic workers and others in less formal jobs.

"We plan to do this through the existing pay-as-you-earn system, so it is only those registered as employers that will submit this data," he said.

Kingon said from the next PAYE submission in September, employers would be required to give details of everyone on their payrolls, whether or not they earned enough to be liable to pay tax.

Sars would then allocate tax reference numbers to each worker.

Gordhan criticised what he called "the culture of easy money" that underpinned corruption and tender abuse.