The SA Revenue Service (SARS) is set to lose almost R300 billion in tax revenue due to the economic impact of the coronavirus and the latest sovereign credit ratings downgrade by Standards & Poor's.
Tax chief Edward Kieswetter says revenues are being hit by reduced economic activity, the number of businesses that were unlikely to survive the impact of Covid-19, and the rapid rise of illicit and criminal economic activities, especially since the banning of tobacco and alcoholic products.The SA Revenue Service is set to lose almost R300bn in tax revenue due to the economic impact of the coronavirus and the latest sovereign credit ratings downgrade by Standards & Poor's.
This was disclosed to MPs on Tuesday by Sars commissioner Edward Kieswetter during a meeting with parliament's finance committees from the National Assembly and the National Council of Provinces, which was also attended by finance minister Tito Mboweni and his deputy David Masondo. Kieswetter told the meeting that based on their study of tax collection figures from the first month of the national lockdown, which began on March 27, they expected tax revenue to dwindle by up to R285bn in the current financial year.
“Based on the first month that we have, we think that, while its early days, revenue losses could be peaking at between 15% and 20% lower. “And that translates into a revenue loss of up to R285bn. And that is the function of a sluggish economy and also the impact of lockdown,” said the tax chief.
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