Is Treasury setting ambitious revenue targets for SARS?

The South African Revenue Service (SARS) has been facing challenges in meeting its revenue collection targets set by the Treasury for the past five years. The question of whether these targets are too ambitious has been raised, especially in light of the recent figures that have been released. Tertius Troost, Tax Manager at Mazars South Africa, highlighted the concerns during a recent interview with CNBC Africa. The 2019 revenue collection figures fell short by a significant margin, raising doubts about the achievability of the targets set by the Treasury. The target set for 2020 is 10.5% higher than the amount collected in 2019, leading to questions about how feasible it is to achieve such a significant increase in revenue collection. With the South African economy growing at a modest rate, meeting these targets will be a challenging task. Another factor adding to the challenges faced by SARS is the issue of illicit financial flows, which result in significant revenue losses for the government. Despite efforts by SARS to combat tax avoidance and creative accounting, there is still a long way to go in recouping the lost revenue. The establishment of the illicit economy unit and the re-establishment of the large business center are steps in the right direction, but their effectiveness remains to be seen. The success of these initiatives will largely depend on the ability of SARS to effectively tackle illicit financial flows and improve tax compliance among large businesses. With the appointment of Edward Kiesweta as the new SARS commissioner, there is hope that the revenue collection efforts will be strengthened. However, it will take time for these initiatives to yield results, and it remains to be seen whether SARS will be able to meet the ambitious revenue targets set by the Treasury in the coming years.