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You know when your toothpaste runs out and you’re forced to squeeze the last little morsel of cavity protection out because you were too broke to buy Aquafresh in bulk at the beginning of the month? Well, SARS is about to flip us over and cut the ends off our collective tubes to get at the very last bit.

Minister of Finance Enoch Godongwana, in his Medium-Term Budget Policy Statement (MTBPS), lamented ‘how longstanding structural constraints continue to limit economic performance in the country’.

Analysts clarified the statement by noting that “Over the past few years, freight rail capacity and throughput have declined constraining growth and exports, while large-scale and prolonged power cuts have plagued mines, factories, farms, and households.”

“This points to a weaker prognosis for domestic economic development, lower-than-expected tax income, and the economy’s incapacity to generate enough revenue to service government debt in the long run.”

Simply put, the inability to keep the lights on and the trains running is making everyone poorer. Tax revenue collection is expected to be R56.8 billion below the 2023 budget estimates, so the government will have to borrow some more to keep the boat afloat.

Debt isn’t cheap, and according to the folks who keep track of such things, “For every R5 collected from South African taxpayers, R1 goes towards paying our increasing debt of about R5.2 trillion.”

You get a better idea of our predicament if you see that number written down. R5,200,000,000,000. Eish.

While the government has come up with some solutions to this monstrous headache, it will still be up to SARS to fill the pot. Roll on new taxes! The Finance Minister said that “SARS will continue to focus on enforcing compliance in areas such as debt collection, fraud prevention, illegal trade suppression, voluntary disclosure, and encouraging honest taxpayers to comply freely.”

“Based on these proposals, it seems taxpayers are going to be squeezed even more by SARS.”

The minister further said, “SARS will collect outstanding tax debts faster, more efficiently and increase audits on taxpayers which should hopefully result in more and larger assessments.”

What this means for taxpayers is additional time and resources to ensure they are fully compliant with all the new regulations. SARS is going to be using a finer comb from now on, so it’s best to get right with your taxes as soon as possible.

Several potential areas for more tax have already been identified which include “excess profits tax”, “windfall taxes”, “higher carbon tax”, and the ever-popular “wealth tax”.

Staying compliant with new taxes is going to be a nightmare, so we’ll leave that to our partners at 123 Consulting. They’re experts at keeping track of tax-related creativity at SARS.

This might be a good time for every taxpayer to seek advice from a professional. We’re going to need all the help we can get in 2024.

[source:businesstech]