SARS sees steady improvement in domestic tax collection

South African Revenue Service (SARS) Commissioner Edward Kieswetter recently shared insights on the challenges and progress made in domestic tax collection during an interview with CNBC Africa. Kieswetter highlighted that despite the economic struggles facing South Africa, SARS has seen a steady improvement in tax collection efficiency. He emphasized that when the economy falters, SARS is faced with the task of working even harder to ensure tax revenue collection is maintained. The impact of economic constraints, such as the challenges faced by key state-owned enterprises like ESKOM and Transnet, can be significant, leading to a potential impact of over 500 billion rand. Key points from the interview shed light on various aspects of tax collection and compliance efforts by SARS, showcasing the organization's commitment to addressing leakages and enhancing revenue administration. Kieswetter underscored the importance of investing in skills, data science, AI capabilities, and technology to bolster SARS's administrative effectiveness. The interview also touched on the implications of the global minimum tax rate for multinational companies operating in South Africa, aiming to prevent aggressive tax planning and protect the country's tax base. Looking ahead, Kieswetter mentioned the need for system readiness by September 1st to accommodate the changing tax reporting requirements and payment allocations. These efforts align with SARS's commitment to ensuring robust tax administration amid evolving economic conditions and global tax standards. The organization's proactive approach to improving compliance, addressing illicit financial flows, and enhancing efficiency reflects a positive trajectory in domestic tax collection despite ongoing economic challenges.