I personally love tax season, as it usually means money in the bank.

A lot of people find the idea of filling out that tax form daunting, though, and once again, South Africa is facing a massive tax revenue shortfall.

Finance minister Tito Mboweni mentioned this in his medium-term budget announcement. Projected tax revenues grew by only 3,7%, whereas Treasury was banking on growth of 10,4% to meet its budget commitments.

The bottom line is that the country is facing a tax collection crisis that could affect us all.

BusinessTech with what will happen if the South African Revenue Service (SARS) doesn’t meet its tax collection target.

Increased Taxes

If SARS doesn’t collect the money that the country needs, we’re all going to suffer. To plug the deficit, the entire country could be required to pay more tax.

Here’s Marc Sevitz:

“Personal income tax and VAT increases are ways for the government to recuperate the money that has not been collected by SARS. Instead of only impacting those who default on paying their taxes, everyone is affected.”

Don’t be that person. It’s not a good look.

Weakened Rand

An increased budget deficit coupled with a weakened economy naturally leads to a weakened rand. This means that food and the general cost of living becomes more expensive.

Other products that are dependent on imports and global pricing, will become more expensive too, Sevitz said.

For instance, South Africa relies heavily on the importing of wheat, which means that products like bread, pasta, cereal and processed meat and others, will most likely increase in cost too.

When your Frosties are the most expensive thing in your shopping basket, you’re going to wish you’d filed that tax return.

Fines and Penalties

SARS has been on the warpath for a while now, so don’t be surprised if failing to pay your taxes lands you in deep trouble.

SARS is clamping down on non-compliance this year, Sevitz warned. “If you fail to submit a tax return, SARS can charge an administrative penalty which can range from R250 to R16,000 per month or R3,000 to R192,000 per year.

If you planned on keeping your head down and hoping they wouldn’t notice, you have another thing coming.

“Besides the penalty, you can also expect SARS to add interest to outstanding tax debt. This means that instead of paying the amount due to SARS, you’ll be spending more just because you haven’t paid. SARS is also able to legally deduct money due directly from your bank account.

There’s a simple way to avoid all of this. Pay your taxes on time.

The deadline for 2019’s tax season is December 4, which is less than a month away, so it’s also time to seriously focus on your tax returns.

If you want to ensure you avoid SARS-related headaches altogether, you could just hand all of the tax-related things on your to-do list over to an expert.

Galbraith | Rushby offers professional tax compliance and advisory services to individuals and businesses.

Let them take care of everything, while you run your business, or do your job, with the peace of mind that comes with knowing you’re a good, upstanding citizen.

[source:businesstech]